I'd either try sourcing a replacement axle, either new or of the same vintage, or use a cartridge BB. I'm no expert, but the hardened surface has worn off a bit there, so my understanding is that the rest will wear quicker now, meaning it's useful life is diminished. That's not to say you can't use it, but it might start feel rougher and develop a bit of play, but with decent bearings and plenty of thick grease you should be ok for while before it becomes unusable.View attachment 381551
I know I'm no David Bailey, but here is the pitting.