Well there are a jillion different ways that a coin can be damaged, so it is impossible to do more than speculate. I'll do that in a minute, but I think that a better way for looking at these things is not "how was this damaged?" but rather "could this have happened during the minting process?" Unless someone added metal to the die, then it was not struck like this. And that doesn't happen so you must have something that isn't a minting error.
For your coin, someone could have taken a pointed object--even a ballpoint pen--and gouged a roughly circular gouge in the field. When they came to a letter or other raised portion from the field, they could have lifted up that pointed object and then continued on with the gouge on the other side of the letter.
"If you climb a good tree, you get a push."
-----Ghanaian proverb
"The danger we all now face is distinguishing between what is authentic and what is performed."
-----King Adz