I too think it's Post Strike Damage. It would be almost impossible for an uncirculated coin to look like this without someone noticing and saving it as an error. It looks like it may have circulated for years both before and after it was damaged. Do you happen to know the weight?
The first US coin motto was found on a 1792 half disme and read: "LIB (erty) PAR (ent) OF SCIENCE & INDUSTRY"