Is the bark-less trunk on the southwest side? If so, and if you had a frosty but sunny spring it could be a sun scald. Sorry to say this, but regardless of the cause your tree is beyond repair.

if you have a warranty.. have it replaced ..

it was severely damaged at digging .... or transporting.. [like it was hanging out the back of the tailgate of a pickup.. rubbing on that spot] .... or upon delivery ...

it is probably healing the wound.. [cant quite tell by the pix} ...but that could take 5 to 10 years ... and it will need pruning to return it to a good shape over the years ...

in my area.. sun scald is usually near the ground.. and it is usually caused by winter sun damaging the bark.. and the cambium layer under the bark ...

https://duckduckgo.com/?t=ffcm&q=cambium+layer&iax=images&ia=images

its the failure of the cambium.. that causes the bark to separate ...

the damage you see above.. is showing the loss of the cambium.. its the vascular system of the tree ... moving energy down to store in the roots.. and in spring.. moving said stored energy up to leaf out and grow... so the lacking cambium.. is why you note the growth differences above ...

it may or may not recover.. but you will spend years looking at it and wondering.. and for many of us.. it just isnt worth it ...

replace it with a tree no bigger than half that size.. it will get established faster.. and outgrow the larger transplant in 3 to 5 years ... [and not hang out the back of the truck ...]

perhaps your guy is be evasive.. because he knows he screwed up ...

ken

ps: improper watering can also add to all this.. you have a perfect lawn.. but you cant rely on lawn irrigation to properly water a huge transplant .. i also wonder if it is telephone poled.. planted too deep.. but if that were the fact.. the wound would be low to the ground... but all these things could add up ..

Thanks very much for the quick reply. Really appreciate the advice. This is the second year after transplant - first year tree was fine. Another question- would trimming the sides of the wound and painting it with ‘tree wound’ paint help it survive? This is my daughter’s house and she is not ready to just pull it out.

No paint. The tree will heal itself, if it can. The sides of the wound start to callous over to eventually close it up. It takes a long time as Ken notes, and it may not make it.

tree time is counted in decades... it is not surprising that an injury under the bark.. did not show during the first season ....

ken