The Montague manual for the pre-2009 Swissbike (with jam nuts below the post clamp) specifies a minimum of 2 1/2" seatpost insertion into the main frame, confirming what you have posted as a general rule of thumb.. the pictures in the manual show the seatpost clamp sitting very close to the main frame body .. the failure in question shows no seatpost insertion into the main frame, and consequently a fail..

I've had Montague Paratrooper/Hummer for a decade used as a mountain bike and now as a mid-drive e-assist mountain bike, I still contend that there was a setup or adjustment error, maybe unintentional, but the result was still unfortunate. These bikes are very rugged.