Wrong sprocket or issue with output shaft?

Yes. You torque it to spec and bend it over to lock the nut.
Steve

Yes that's exactly how it works, JohnnyMoff.

It makes you wonder who got that messed up with the wrong parts in the first place and what they were thinking. Having said that on my recently acquired KZ1000, when I came to remove my front sprocket, I was ready with the airgun etc. prepared for a battle to remove it, but I found the nut was looser than finger tight, but being retained by the lockwasher, so apparently someone didn't tighten it up, but at least fitted the lock washer so it wouldn't fall off . Another reminder why you need to go through all the basics on a used bike before using it in anger, you never know what abominations have been committed by previous owners. Something in the back of my mind kept telling me to be cautious of the chain before really riding it, I'm glad I allowed that uncertainty to lead me to buy a new chain and sprockets earlrier than intended, I was going to wait until next spring. I don't know if it could have come off because the lockwasher was performing it's function, but it might have suddenly wiggled the tab out of the hole in the sprocket or broken it with fatigue. I'm sure it was bad for the splines at the very least for it to be loose and moving around.

Even it you tighten in down it can come loose with vibration. I torque mine and have for years and when I go to take it off it doesn't take as much as I expected. I've had the nut spin off but it only got as far as the cover. I can show the marks to prove it.
Steve