I'm glad you guys have reported this issue. I'd never heard of it and agree that the 1/8 tube construction is pretty lame.
I thought the OP reported that he pushed with the closed grapple against a tree. I can imagine that would put some stress that the grapple was not designed for. The upper jaw on this style grapple is really just a clamp to secure the load and should probably never be doing anything more than that. The bottom tines are designed to push, shove, dig, lift etc but the top is really just a clamp.
That said, I am still surprised by the 1/8" square tube. Compared to how my Millonzi grapple is designed, the WildKat seems to have an inherently weaker attachment point for the hydraulic cylinder on the top tube. If I am seeing the two examples correctly it appears the Wildkat mount is just welded to the top of the square tube. If you look closely at the third and last Millonzi photo below it appears that they have an attachment bracket that distributes the load over both front and top of that same top tube. It also appears there is an additional piece of steel welded on top of the top tube that would also strengthen it further. The forces from bashing the top grapple into a tree would therefore be distributed more broadly and would push directly into the tube rather than put all the stress on a mount tower welded to just the top of the top tube.
I've had my Millonzi 48" grapple for about six years now. I've bent some tine tips but never come close to this type of serious damage. I've posted some photos below of the grapple design. I imagine it has thicker square tube but I think maybe the design of the attachment could be even more important. I'll look this weekend and get some more detailed photos so we can compare the basic design and I'll see if I can confirm that the tubes are thicker than 1/8th too if I can without drilling holes etc.