I'd almost put this in the "total fluke" category.
This sort of damage is common, but tyically a cylinder with this much damage would immediately present with excess blowby and oil burning. Apparently that was not the case. Dumb luck. The seller got incredibly lucky. I woudn't even have invested the time he spent putting it back together. Literally the odds are 99:1, against.
Unlike vertical scarring the horizontal variety will sometimes squeak by undetected in a compression test, even when it's this bad, so no joy there.
Knowlege is power, but you can't cover every contingency.