According to my Greenberg Guide 1970-1991 Vol 1, it's more of a design flaw not a defect, probably caused by some cost cutter at MPC. Unlike earlier scale Hudsons, Lionel only used one set of ball bearings and 1 c-clip on one end the motor shaft on the 783. This allowed too much play, supposedly causing the armature to bind. This was fixed with the grey 785 Hudson by using 2 bearings and 2 c-clips on the armature. You would need a new 2 slotted armature and another set of bearings to upgrade an older version, but since yours runs fine I wouldn't worry.
Neil