After a clash or other damage to a die, they are polished to remove the damaged area. In some instances, parts of the original detail get removed, which is what it appears has happened to your coin.
Coop has an excellent example in his image collection of a 1974-D cent with similar missing details. Maybe he can post it here.
You have a nice example of an over polished die, I would keep it in a 2 X 2.