What is happening with this shock failure?

Bilstein 5100 24-321150 shocks in the rear, installed just a few months ago. For the last few weeks there has been noise coming from the rear of my Tundra and I finally was able to chase it down. The right rear shock was loose and the stem was rubbing a hole in the truck bed. No idea how this happened... can someone explain what is going on here? I referenced the Bilstein installation PDF online but there is no mention of the piece I'm holding in my fingers... did something shear off, causing the piston to travel too far? Thanks in advance for any insight as to the problem and solution. I'm assuming I just need to replace the shock. Since they've only been on for maybe 5000 miles do I still need to replace the left one too?

EDIT: So I determined the piece I'm holding in my finger is where the plastic boot secures to the piston but not sure how that would have come off yet still be on the piston?

 

It's assembled wrong so the shaft is sliding through the mount.

Put everything there except the top nut/washer on the shock shaft before you put it through the mount.

Edit: or that's my guess having not seen how the old one came off.

 

Look at this pic....

 

It looks like there's a bushing missing. Usually those two big washers would clamp two bushings with the frame mount between the two rubber parts. The washers squishing one rubber piece and that long section of collar looks wrong.

Add a rubber bushing on the collar portion you can see, move the bushing that's in the photos to the bottom of the frame mount, and move the top washer to right below the nut.

 

I had similar failure from factory. There is supposed to be a rubber cushion and washer installed on shock before its inserted to the bracket on chasis. What happend was the metal on metal eventually broke off retainer shown on previous posts