Behind the dust boot is a square cut o-ring that is the piston seal and helps it retract from the rotor a few thousands when you release pedal pressure. Most likely when the piston came out too far that seal went under the piston, so when the piston got screwed back in, it pushed the o-ring out of its groove, causing a fluid leak bypassing the piston...
Modified Mustangs & Fords Project Snake Charmer
2006: 2/14 Delivery by Stewart Transport, 8/15 becomes a roller, 8/26 drivetrain installed, 10/15 first engine start, 12/23 wiring completed, 12/31 body test fit
2007: 2/25 first go-cart, 4/15 leaves for paint, 8/24 paint prep begins, 12/10 paint work completed
2008: 1/7 home from paint, 2/1 titled, tagged, and insured, 3/15 interior complete, 6/2 alignment, 6/4 Graduation