The aluminum wire was XLPE. Yes, you're correct: the installers were clearly not careful. But from my observations over the years, uncareful installers vastly outnumber careful installers.
I understand that the fault currents will still occur with copper and that any fault current is unacceptable. The advantage of copper is that, while it will erode over time if there is a fault current, it will not expand and burst the insulation jacket the way that aluminum does. As aluminum corrodes into aluminum oxide, it swells to considerably larger than its original diameter. I've seen it swell to over 3 times the original wire diameter. This causes the insulation to rupture and split beyond the area of the original damage, which exposes a greater surface area of the conductor to the water, which in turn increases the fault current and accelerates the degradation of the aluminum. In one case, there was damage to two adjacent conductors in close proximity. The aluminum in each conductor expanded until they eventually made contact and BOOM! We had to send an inspection camera in to ensure the PVC conduit was not damaged from the explosion. If it had been, it would have been very costly to run new conduit because that buried raceway went under another building.
I would not want any wire, aluminum or copper, to have damaged insulation. But copper does provide a significant advantage when there is damage to the insulation.
.