Fortunately not all stainless steel alloys are nonmagnetic. The only problem is, that I can't find a small enough magnet I could get pass the 5mm or so space that's immediately after the hole. "Made for picking up tools and bolts from hard to reach places" my ass. All those tools get stuck on the small space.
Had some leftover fork oil that I used to fill the gearbox almost completely to try to flush the bit out but no luck.
Sachs, my first try on fixing the issue was using a thread tap but the threads were so badly stripped that there wasn't enough material anymore for working M10 thread. The helicoil seems to work fine, at least for the past dozen or so bolt removals and reinstalls.
Seems I'm starting to run out of options, unless you gentlemen might have any suggestions.