Bobbo, gotta ignore the sky ain't blue arguments....
I don't know squat about Reese hitches, but simply by the picture you posted, the hole in the trailer is way smaller than the hole in the bracket and I seriously doubt this was some type of shouldered bolt, so you're correct, bad install job. Luckily, that application, the bolts aren't technically there for their shear or tensile value, but rather to locate the bracket only and keep it bearing on the trailer frame and it probably just came loose and backed out which is less a function of diameter and more install quality and/or missing that it was coming loose on a pre trip walkaround.
