I nicked mine, about that bad. I was trying to be really careful, and using proper seal pullers, moved the wrong way, and did the damage. I had done similar damage years ago on my previous Miata. I fixed both of them with JB Weld. As far as I know, neither leaked. I did my T4R 5-6k miles ago. I keep a piece of cardboard under the engine in my garage, and there is not yet a drop of oil on it.
It is risky trying to repair it. If you don't do it right, you may have to take it all apart again. The repair sleeve mentioned above might be your best option, being the best value, in terms of cost vs risk.
If you choose to repair it, the following is what I would do (and what I did successfully, twice):
Work slow, methodically, and be patient. It will take some time.
Before you do anything, first clean around the nicks with acetone. You don't want to be grinding oil and grease into the tiny sanding scratches.
There are small amounts of metal sticking up around the edges of the nicks. Those need to be sanded down next. Anything finer than 400 or 600 grit sandpaper won't remove anything, and won't do anything but make things shiny. I would start with 220-240 grit to remove stuff.
Wrap sandpaper around a popsicle stick or something, and work on sanding down any metal standing proud of the nicks. That metal standing proud is what will eat up the seal. Also partially wrap sandpaper around the camshaft and work it back and forth. When it appears to be smooth, then go to 400, then 600 grit sandpaper, doing the same thing, to polish it up some.
Then clean it again, with acetone on a rag. Several times.
Mix up the JB Weld, and apply it with a toothpick. Use a magnifying glass to be sure that you filled the nicks completely. You want it to be filled proud of the nicks but not so much that you have to spend hour sanding it back down. Let it cure a full 24 hours. You can speed that up with an infrared heat lamp, if you are careful to keep it back far enough to just get it warm.
Use the same techniques as before to sand down the JB weld flush with the outer face of the camshaft. I think finishing up with 600 grit will get it smooth enough. Going finer than that afterward won't hurt anything, but it probably won't gain you anything. Try to feel it with your fingertip and/or a popsicle stick, to make sure nothing it still still higher than the camshaft surface. If your finger or stick hangs up on anything, you need to keep sanding.
If you cleaned it well and let the JB Weld cure properly, it will stay put. If you sanded it down properly, it won't leak or wear (or eat up) the seal. Both parts done properly will make it as functionally good as new.
