Not sure what I am seeing in the first KA in KANAKA'OLE. Sorry about the pictures, it is the best I can d with what I have
No. Die deterioration is damage to the die, probably several hundred or more were produced before the die was replaced. It is a common error and therefore not valuable. One reason to keep it would be as an example, should you wish to show it to others. Die cracks or Interior Die Breaks, in and of themselves, are also from damaged dies. Depending on the severity of the die damage, and how it manifests itself onto a specific coin can be and is collectable. VAM enthusiasts use die cracks to identify die marriages and therefore accurately determine VAM varieties. But the die crack merely aids in the identification. People save what they like for dozens of reasons, so if you like this coin then save it and pay no attention to the critics.
No, it’s considered a spender. The mint uses its dies well past the point of retiring them. Worn dues are responsible for a lot of things but they only contain face value.