That pinion should not have that much clearance to turn that much, assuming the wheels aren't turning. If you think you are working the spiders or turning the wheels, put it on ramps or put the e-brake on and check again but the pinion should not be that sloppy.
If it is, pull the diff and see what's going on inside, could be a number of things, but getting it out, seeing if it's ruined the gears, and fixing what needs fixed is in order.