steering wheel won't lock, and sounds like it's loose
I am not sure I understand how the upper shaft would be restricted from still collapsing though.
Understand, it's collapsed already. The shear pins
prevent it from collapsing
until they are sheared. It was designed to collapse as a safety feature.
A severe enough frontal impact could/would push the shaft backwards towards the driver. If the shear pins were intact, they would offer some amount of resistance if the lower shaft was forced backwards by an impact. So theoretically if you have no pins, there is no resistance acting on the two halves of the shaft and the
lower half becomes a spear.
And unfortunately as you experienced first hand, those stupid shear pins are all that prevent the shaft from moving up and down.
Put it back together however you choose. The likelihood of you getting impaled to the back of your seat in a crash is pretty slim. Only thing I am saying is that the potential for that scenario is greater without the pins. The factory put them there for that reason.
I have rebuilt several columns myself, a couple of which had collapsed shafts like yours. I went and got new shafts with the pins intact. Wasn't a big deal, I just wanted that little extra peace of mind.