DIAGNOSIS The drive spindle is turning but the outer bowl is not locked in place. This causes the paddle to contact the stationary plastic bowl. The outer bowl is either not fully twisted into the base or the locking lugs are damaged.
FIX Stop the machine immediately. Unplug it. Remove the lid and inner pint. Grasp the outer bowl and twist it counter-clockwise to remove. Inspect the three plastic locking lugs on the underside of the bowl for cracks or breaks. Inspect the three slots in the base for debris. If intact, re-insert the bowl and twist clockwise until it stops and the arrow aligns with the lock symbol. It should feel firmly seated.
IF THAT DIDN'T WORK The issue may be the spindle coupling inside the base. If the bowl lugs are intact and it's seated correctly, the drive dogs on the motor shaft may be stripped. This requires disassembly to inspect.
HEADS UP Running it with this noise will destroy the paddle and shred the bowl. Do not continue the cycle. Damage from this is typically not covered under warranty if caused by improper bowl installation.