It is Die chip.. not dye chip. I think it is a normal plating issue since it is minted on a Copper Plated Zinc Cent. The Reverse shows signs of Split Plating which exposes the inner zinc.
Zinc rot. The copper plating was breached and the zinc underneath started to corrode. Probably started as split plating next to the mm. Not an error
It's almost always some kind of damage. True errors are rare, and there are lists of them by type to explain what they are and how they got that way.
from mid 1982 on, they made cents not from a Copper disc, but a Zinc core with an 8 micron thin copper plating. If you pull out a wooden ruler that would be 0.000314961 of an inch or 0.0080000094 of a millimeter .. I hope your ruler goes that small. This super thin layer easily gets damaged by a variety of means. One simply way of damaging a smooth 8 micron surface is to stamp it to some design. Such as they do with cents. So the thin copper layer gets stretched and it breaks and exposes the underlying zinc core. Zinc quickly corrodes when exposed to simple things like steam (think wash/dryer type). and a multitude of other stuff hitting it's surface. The problem you see with the D was very common as they still hand stamped the die, so but stamping it too hard they made it too deep, And making it too deep made the copper stretch too much, thus splitting it. Thus causing an immediate longevity problem. I think pre 1982 cents will outlive all the post 1982 cents as they'll just corrode and eat themselves over a short period of time. Why ppl collect "bad" zincolns is beyond me. Thus Chris's comment ....
zincolns are susceptible to a wide variety of problems from just being used and also from their basic manufacture, including (but not limited to) the following common problems: https://www.coinworld.com/news/us-coins/2016/08/unexpected-bumps-on-coins-surfaces-vary.all.html 5. Plating blisters Plating blisters develop in the coin in the immediate aftermath of the strike, as gas expands between the core and poorly bonded plating. Among domestic coins, plating blisters are the exclusive province of copper-plated zinc cents. Blisters are generally small and subcircular, with a smooth surface and soft outline. They can occur anywhere on the field and design. The design continues uninterrupted as it crosses a blister. 6. Occluded gas bubbles Solely the province of solid-alloy coins, occluded gas bubbles form just beneath the surface and push up the overlying metal immediately after the strike. Like plating blisters, the surface is smooth and the edges soft. The design is uninterrupted. 7. Corrosion domes Contaminants trapped beneath or penetrating the surface of aluminum, plated zinc, and plated steel coins can react with surrounding metal to form an expanding front of spongy, corroded metal. The resulting solid dome will superficially resemble a hollow plating blister or occluded gas bubble. In many cases the corroded metal bursts through and may fall out, leaving a crater. The most important thing to remember is that the coinage you are looking at, which is pocket change is first and foremost *designed* for commerce, not for collecting. It's quality is based on commerce, not for collecting, so "errors', "damage" et all doesn't really matter except for the issues that really deviant from a "good" coin. A "good" coin is one which is error free (up to a point) so that cashiers recognize it as money.
