The diameter of the fastener is what determines the minimum thread engagement needed. 7/16" stud needs 7/16" of thread engagement. Maybe a bit deeper for the tapered nature of the end of the stud? FWIW I run 1/2" studs up front with open lug nuts, and it definitely does look weird seeing a fair number of threads exposed on the nut. I measured before taking the plunge, they meet the above spec, and have never loosened on me. Probably 5+ years. One persons experience does not equate to proof, just anecdotal evidence that the formula is correct.
Are those things really 100ft-lbs? 70ft-lbs is the max for a grade 8 7/16" fastener from what I see, dry.
Probably a few options for cause of failure, but I'm SURE the shop wouldn't have used an impact gun to install them.