Looks like it was pierced with a square nail. I have heard of folks nailing a coin to their doorway for a talisman.
The lady I work with brought me her coins a while back to give her an idea of what she has.... One coin is a 1916 Mercury dime and it too has a square hole punched dead through where the mintmark would be... Certainly is the work of an old square nail. I would bet it was done to adorn a young lady's neck.
Definitely damaged by a nail. Why and when are only the person that did it knows. Edited to correct spelling
I was always taught that they were called "cut nails" because they were cut from a sheet of metal. Machines doing this could turn out nails a lot faster than people doing it by hand. https://en.wikipedia.org/wiki/Nail_(fastener)#Cut
Perhaps a small head square center punch, used in machine shops, could have been the crude method. Interesting post for guesses and opinion. Thank you.