Maybe I should explain my mood on this.
I might accept a little B movement. A big Might, if this was the case when the hub was like this new.
(B) is resulted from an ampliication from the C point, via the radius lenth of the outer rim and tyre.
Where as (A) movement is not amplified by the rim radius lengths at all.
Growing>2mm. (A) movement in Alans good picture, as decribed by the owner of this MP is Growing, increasing AKA getting worse, is totally unacceptable by any standard and should be at least checked. IMO.
(A) movement should not be happening so much to notice (A) movement alone, but (B) only should be considered acceptable .
I could be right. A cracked bearing seat reqiures only a small fracture, hardly any use of the bike to aquire such damage, and easliy to be made worse with weight applied.
If rider can get 2mm (A) movement by using only hand pressure, this would be worse in proper use.