It should be sanded out. Effectively, the balls a burnishing the surface of the washer. After a prolonged time, they will create a groove in the washer. The burnished surface is slippery, and so the diff is more inclined to slip under power, especially with ceramic-coated balls (Yeah, I said that too!! )

Irrespective of the use of a thrust race or cone washer in the outboard side of the diff, the burnishing of the rings encourages the diff to slip, and then it burnishes the rings more, and then it slips, and then... Providing the diff is kept tight with no slip, it will last longer.

As relevant to a smooth diff is the c**p that gets between the diff balls and their holes in the spur gear. This rapidly creates a 'grease' that drags on the balls and makes the diff 'sticky'. Often, simply cleaning out the diff balls and their holes in the spur gear will restore a diff to good condition.

Lastly, be sparing with the grease. It is only there to provide a lubrication between the ball and its plastic hole - it has no other function. It isn't there to lubricate any of the steel parts - if it was then the diff would slip all the time!!!