2002 GS500 Brake Wobbly

[Foxtrot Tango]

So last weekend, during a ride, I noticed some odd "squealing" noise coming from the front of the bike. I looked it over and discovered that the front brake caliper "wobbles" a little. I went to torque it down and found that the attached bolt was loose. I was able to rotate it with my finger. In the process of tightening it, I noticed I felt no resistance and I saw a cotter pin rotating. Scared that I was going to tighten the whole assembly and force the pad onto the rotor, I decided to loosen it. While loosening it, I saw flakes of something fluttering down

1) What is causing the front brake assembly to wobble on the rotor?

2) What is that bolt supposed to do? Is it supposed to be tightened all the way or be loose as is?

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[Foxtrot Tango]

A friend told me the following: Apparently that bottom bolt isn't threaded at all and just sort of spins. The unit itself isn't supposed to be super rigid and a little bit of wobble should be fine.

If this is true, then I got all panicked over nothing. Like always.