Is the hammer supposed to rotate on a stationary hammer pin or is the hammer and hammer pin supposed to act as one piece and the pin rotate in the receiver? My Bushmasters hammer/pin rotates in the receiver, which is odd because it seems that would subject the receiver to wear.

Thanks...

The hammer pin is retained in the lower by the J spring in the hammer.  So as the hammer rotates, so will the pin.  The trigger pin is retained in the lower by the spring legs of the hammer spring, and here too, you will get some rotation.   Neither of the two pins is locked directly into the lower, so yes; over time this normal movement of the pins will cause wear to the receiver pinholes (rotation and horizontal walk).

Since the standard rifle has built-in tolerances in the specifications to allow receiver pinholes elongation/over sizing with the FCG, the receivers have a very long life, and standard pin wear should not be a factor for concern.  

Now in regards to two exceptions, the 9mm lowers were the hammers are part of the mass/tension calculations for bolt movement retardation (excessive force to the hammer pin from the bolt), and RR M-16's lowers that are not easily replaced at will, Companies like KNS have designed interlocking pins to keep the FCG pins from rotating/walking to minimize this wear.

General census is unless you are running a match trigger group where receiver pin hole elongations/wear will change fine tune settings, or one of the latter rifle listed above, then running with the standard factory pins that rotate has no adverse effect over the longevity/normal life span of the rifle.  The mainstream thought here at the site is to just keep the standard factory hammer/trigger pins lubed with CLP to minimize galling, and let them spin.  

Now on the other hand, if your trying to make the lower receiver alone last for several hundred thousands of rounds, the KNS reinforced pin sets are a bargain at $29. And, since the KNS kits are available with oversized diameter pins, they can even be added to slightly worn receiver to tighten things back up.

I appreciate the reply.