TCMB rides his bike harder than the average owner, and this is the first instance of this we’ve been made aware of. Group buys of re-engineered shafts would be unrealistic. If this were a common failure then perhaps. It would be more practical to do as Mark911 proposed on existing new shafts to lessen the likelihood of a crack from propagating.
I suggested a group buy, as this is where Alta owners congregate.
If I owned one - I had intended to get an Alta, but they closed up just as I was going to order one - after seeing this, I'd be having a new shaft made myself. It's a quite simple shaft, compared to other main and countershafts I've had made for problematic gearboxes I've dealt with over the decades. So even as a 'one off', it would not be particularly expensive. Perhaps $400 AUD, at the most, with a re-done collar to take another sealing solution. As a 'group buy' for even a small quantity, the cost would be much less.
As to machining the original groove to have radii -well you'd be further reducing the diameter at a Major stress point, and, more than likely, having to re-harden the shaft , If that were possible.
It's a dreadful design that Will probably rear it's head on more bikes - it's not perhaps of Alta's doing, but it's still dreadful. But, I guess some here will just get their backs up with what I've said, not being able to take a legitimate engineering criticism. It's a damned shame they went belly up, and I am anxiously awaiting the release of other manufacturers E bikes, of the same 'type' - eg, Full Enduro / MX spec, not glorified MTBs, nor "halfway between a Trials Bike and Enduro Bike" that the KTM 'E' Freeride is, to me. I've ridden that quite a few times when I've been in Europe, it's good for what it is, but I want an E Bike as I have described earlier. Like the Alta's were.