Why this happens is the anvil die is stationary. (no adjustment) The hammer die is an adjustable die that needs to be centered over the reverse die. When the alignment is incorrect, then the hammer die is out of alignment, while the anvil die is centered. In other words, on this coin, the obverse (hammer die) is not centered on the coin. The reverse (anvil die that cannot be adjusted) is centered. When the devices fall over the rim, then they become collectable.

Note the devices not centered on the obverse?
When this alignment is allowed to continue, then the edge of the die starts to wear on the collar reducing the circumference of the die. Part of the die is being worn away. This is called attrition. Here is a coin that shows what happens when the die is altered this way:


Note how the edge of the die is moving inwards toward the motto?




The mention of hammer and anvil die is necessary as the obverse isn't always the hammer die.

When both sides of the coin is not centered, it is called an off center coin.

Sometimes part of the reeds on the edge may show or be totally missing if the collar isn't in place.


Hope this helps.