This isn't really a framebuilder question, or an engineering question. The main damage is reputational. My first thought is that it will last a long time, but I don't know the rider. I have a rather stoutly built Surly frame in my attic that is broken, because the rider is a madman. There is another rider in town that destroys wheels.

I don't think a responsible engineer would offer a definitive opinion about this, but I have been unpleasantly surprised before.

Their are "standards" of behavior that every industry has. Bike shops drilling holes in structural frame members is not the usual one and thus subject to argument and speculation. This isn't comparable to fixing a flat tire or when to replace a brake pad. Our court system is designed on convincing another (judge or jury) that what happened is someone's fault, and because of that fault that someone becomes guilty. Note that it is the finding that determines fault, not what might actually have happened (and one only has to look at our national politics to see how the courts are manipulated this way or that way for someone's benefit). That a shop choses to avoid this possibility when the judgement needed is questionable is reasonable.

I'll add a bit more to this kind of situation. The shop I work at prides it's self in being very "customer service" focused. I had a talk with the boss about this just last Wednesday, and he agreed that "service" is not just saying yes to a customer. To us service is providing that customer the best future experience with their bicycle, and not mere yes menning when the customer wants something beyond the shop's better judgement. Andy

Our shop has refused to do some customer requested services when we feel there is a potential safety risk as a result of the requested service.
We also don't hesitate to recommend not to repair a bike when the repairs would exceed the value of the bike...except for 'sentimental' reasons ie we had a customer come in last season with an old bike that had seen better days. The cost of the repairs/service would far exceed the value of the bike but the customer told us he bought the bike when he graduated from college and took it to Europe with him where he spent the summer biking throughout Europe. He just wanted to be able to ride the bike a few miles now and then to remember that summer. We made the bike safe to ride and he was a very happy customer.

A hole of that size could be a problem were the customer to hit a pot hole, etc. hard enough to buckle the frame at the hole. The possibility of the rider going over the bars in such an instance is likely with who knows what damage/injuries...I'd not want that on my conscience nor would I want to be considered libel in any form or manner.

I've been a service manager, sales person and wrench for forty years in three different shops and there are times you just have to say 'no we aren't going to service that bike because it would be unsafe'...for the protection of everyone.

The lbs I go to just tells people how much it will cost to bring their bikes up to a safe standard. There is no reason to subsidize customers efforts to put themselves in danger just because they have cheap bikes. I used to work at a shop where we would do what the customer wanted no matter how much the bike needed to be safe, and it was a mildly traumatic experience some days.

There is a fairly large, racetrack-shaped insert that might be able to be brazed into this larger-sized hole. The insert outer is steel and is brazed into place. Inside the outer section is an aluminum insert that holds a housed cable in place. I am still a newbie so can't post links or pictures, but if you search Metal Guru under Fittings, see Internal Cable Guide or Double Internal Cable Guide.

Thanks for your post. I haven't been keeping track of Metal Guru's offerings, they have a fairly impressive number of fittings https://metal-guru.com/collections/fittings