I wonder if there was a scuffle in daycare that they didn't tell you about. The fact that he was doing well and suddenly started shrieking makes me think something happened to make him uncomfortable.
Jillie has a terrible shriek she lets out at the slightest injury. I expect to see a missing limb, but it's just a last-ditch defense mechanism.
I'd try smaller, supervised groups for a while and see if it helps. Of course, it doesn't solve your day-care problem, but it might be easier on him.
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