its when the piston has enough room to move side to side in the cylinder. The pictures on the site show wear on the sides of the cylinder bores. Gradually it wears the cylinder into an oval shape, which isn't good when the pistons are round (or at least start off that way).
It's probably due to the piston rings being a poor fit/too small, or being worn, which would be a problem in old cars with worn engines. I think GM tried to have a looser fitting piston ring to reduce drag and therefore fuel consumption - do you think it worked well?
The fuel is usually a fine mist or turned into a vapour when it gets into the combustion chamber - so I don't think it is around long enough to run down the cylinder too far. I think the other way with oil usage is the bigger concern.