M5 bolt went through to the other side of the seat stay

Nice, looks good

Does the other side have a hole as well? Did you punch through the entire wall of the stay, or is that hole just how the frame is? Seems wild to me to imagine you punched a neat hole through your seat stay with a blunt-tipped bolt. If it’s indeed a hole punched by the bolt, well… I’d personally send it, but I will ask you not to quote me on that and exercise your own judgment cause I’m not an engineer and don’t know anything about the stresses in that area. If it’s a hole that exists on the other stay as well, and you just have a bolt sticking through a hole that was already there and it’s not interfering with anything, then having the second hole to stabilize it will only help the bolt’s shear handling.

If you went through this frame with a flat ended screw like that, you would most likely feel resistance, followed by an outward bump in the frame, followed by a slowly developing crack, not a smooth hole. You would surely notice something was wrong before any of this happened. That hole was already there.