It certainly does not make sense. I have never heard of a Kubota catastrophic engine failure - even under load. Can I ask how many hours this machine has on it?
Regarding steel quality, I broke my pto gears once by mowing rocks without a shear pin or slip clutch - but the steel quality of Kubotas is very high.
When you say the engine blew idling, do you know which engine parts actually broke? A part failure at idle is usually a soft landing and repairable. If a pto shaft broke at no load is it possible it got damaged in some earlier event and finally let go?
I know it doesn't help you in your situation but what you describe is extremely rare. It is so unusual that you should see if you can get a Kubota factory rep involved. They are a very reputable company and I'll bet they'd be interested in getting to the bottom of this. Not so much from warrantee obligation but from an interest in failure analysis. Worth a shot. I'd go either through a large dealer or call Kubota of America direct in Columbus, Ohio. Be patient and explain you are not out for blood, you'd just like some help understanding what could have caused this. They might surprise you.
Good luck and keep us posted on this one.
Take care, Dick B