The standard practice (based on Mexico City and the observable results on coins) was to use a cookie cutter like press that punched blanks out of silver strips. A piece of silver on the edge as appears here indicates a broken die in the press. Either the circular shaft die or the circular hole through which the blank passed (also a die) had to be broken. Such a blanking press would not have remained in service long because the blanks would be overweight, they require extra work to adjust and they clog an edger.
If this type of error was seen on a normal Mexican issue it would strongly suggest the coin was bogus. At Lima, quite frankly much more study is needed to be 100% certain. There are very few Lima contemporary Class 1 counterfeits and there are absolutely no confirmed Class 2 varieties. So as a counterfeit it would be rare. As a genuine coin it would be a rare minting error. Either way good news.
Being overweight is absolutely expected.
One comment I missed on my first reading was ...
There is a strange blank section on the edge that appears finely tooled, located between the A and N in Hispan.
I missed "finely tooled." In my book I discussed methods used by people to remove silver from circulating coins. One method I have seen described is drilling several holes into the edge of a coin in a fan shape. The silver removed is replaced with a lead tin alloy that approximates the density of silver. The only tell-tale feature is the damage to a section of the rim. So I guess my question is what do you mean by finely tooled and can you take a photograph or make a sketch to explain what you mean?
As of right now, while I have heard about this method of silver theft for over 50 years, I have yet to actually see an example of this having been done. So if you have one of those (where the point of entry was through a rim cud of sorts, that would be even more rare.
It is certainly interesting and may represent a rare case of a bad blank being used or a rarer method of silver theft being employed.