Weird problem with starter today. Opinons welcomed!

I would start with the relay, cheap and easy. If that's not it you have a spair for the trunk.

The thing that concerns me is the Bendix drive not retracting. IIRC they are designed to be rotated back in when the power is off ie relay disengages and the flywheel is spinning faster than the starter.
The bendix didn't retract, because it was working correctly. With the starter motor ENGAGED, which it was, the bendix did exactly as designed.