Joined: Jan 2009
Posts: 44,345
Likes: 6,645
From: New York, NY, and High Falls, NY, USA
Bikes: 1962 Rudge Sports, 1971 Raleigh Super Course, 1971 Raleigh Pro Track, 1974 Raleigh International, 1975 Viscount Fixie, 1982 McLean, 1996 Lemond (Ti), 2002 Burley Zydeco tandem
An AW hub should never slip in first. This is not an adjustment problem.
To answer your question, no, this wear doesn't affect adjustment.
If it slips on the stand, you have a seriously worn clutch. Pop a new one in, and it will be like magic.
Neal, do you ever see weak pawl springs? I think I have, but it's been a long time for me.