John's first thought is correct. This is a rim Cud. These occur when bits and pieces of the edge of the die crack and fall off. And no, the rim Cud has nothing to do with the gashes (hits) on the coat.
No, the rim upsetting is completely separate. A piece of the die cracked and literally fell off leaving a void that creates the Cud. Any imperfections from the upsetting process would be flattened out during striking.
Yes, Cuds will continue to be cranked out in an ever-enlarging manner as the die chips away until the press operator changes out the die. Rims Cuds are fairly minor but do have some value. Larger Cuds that affect significant portions of a face are where the real money is at.
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