Jonathan,
Bypassing fluid typically implies internal to the master cylinder in the circles I run in. External leaks are just leaks and would indicate damage to the secondary cup/seal on the primary piston or the bore near that seal, whereas bypassing fluid indicates seal or bore damage between the primary and secondary pistons which doesn't result in fluid loss. If you bypass enough fluid volume, then it won't allow you to build any pressure which is what sounds like happened to you. Without any external leaks, I can't think of anything else that might cause those particular symptoms.
I'd be tempted to pull the MC piston and inspect it as well as the MC body for loose machining chips or other contaminants that maybe didn't get fully removed prior to assembly. Even a casting burr or flash of some sort...I'm guessing here. Something had to cause what happened, and you mentioned that it was immediately after hitting the transition on your driveway a little harder than usual. Maybe it knocked something loose.
Tobin
KORE3
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