It's not really that bad and doesn't distract from the rest of the coin. I am pretty sure you could get a lot more than half value for it. As for the glue theory I'm not sure looks more like it's been flattened to me.
Assuming the reverse is similar to the obverse then $300 would be fair market value for that piece. That is about half what a problem-free AU would bring.
While I think your piece is probably genuine, I'd confirm the weight and diameter just in case. There's something about it that doesn't look quite right to me.
Thanks for your input everybody. I put together a type set in a Capital Plastics holder to display on my dresser. I'm in that silver dollar at $430. The dealer did indeed sell it to me at half price, but as a $900 coin before the damage.
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