I thought I'd update this thread. Engine is still running fine 6,000 kms later.
After many hours of online searching and watching youtube videos of this engine being disassembled, the most likely cause of the metal sparkles is cam shaft gear wear. Audi used sintered aluminum for the gears and...
There is no metal in the filter, it's paper and plastic. Cutting the filter is not the source of the metal. Seeing the metal particles on the filter inspired me to cut it open.
Both my Audis have an integrated oil filter housing and you swap in/out a new filter element.
2019 SQ5 bought used from a VW dealer in March 2023 with 27k kms or 17k miles. I used to camera to verify that it had new style rockers before purchase (which had been an issue on some 2018 cars - needle bearing failure).
Oil was also changed by the dealer at the time of purchase but I don't...