Bigbore, you are correct on both, in the first, the firing pin knocks the case forward until it finally fires. The sides of the case grip the chamber and it sets the primer back. Worst case scenario is that you get a case head separation, releasing dangerous gases through the action.
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I had the same problem on my Remington 700 VS 308. After firing 20rds I noticed that the primers were pushed out further than the case head anywhere from .002"-.006" ( .006" is how much the shoulder moves in my chamber from new brass to properly fireformed). I am unsure if my load was too light or if I just have a rough chamber that will not let the brass slide properly. The only way I could get the brass to fireform properly was to lube the outside of the case same as you would to full length resize and fire. I hope this helps Playersc
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Lubing the case is a bad idea. I would love to see a test design on this, as there is no doubt that you are creating an incredible amount of bolt thrust. Meaning the case is not able to grip the walls of the chamber, so the entire case is able to push back against the bolt face with much more thrust than is normal. With a heavy load, this "Has the potential" to be a disaster. It may not ever, but it is certainly not a recommended practice. Headspace problems can only be corrected properly one way, and that is by having CORRECT headspace in the first place, with a properly cut chamber.