an overstruck planchet is the correct description in the auction. the letters look like they could have come from letters on the ring used to hold the blank in place, but thats a guess.
That's a piece that used to be the center of an Encased Cent - usually a good luck penny with advertising on them, they were very common years ago. It's not worth any premium value because it's a post-mint restruck coin, and numismatically is considered damaged.
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