How can any matter contract to its Schwarzschild radius if gravitational time dilation clearly states that all clocks stop at that point. So any contraction any movement would stop. If that is so why all this talk about objects which can never form in the first place?
"Clocks stop" or "time stops" at the Schwarzschild radius only as seen by a far away observer. Where the matter is falling in, if it were wearing a wristwatch, it'd still see one second go by every second. Time continues as normal, and matter squeezes into the BH.
True, as seen by a far away observer, the matter will appear to shrink down to the Schwarzschild radius but slower and slower, all manner of light or other particles decreasing in energy (longer wavelengths, redshift) but this appearance may be remedied easily: just go dive into that BH and see for yourself that time doesn't stop!