It is obviously damage - possibly a counterstamp of some sort. Is the coin damaged (flattened) at the corresponding location on the obverse?
I didn't noticed any obvious signs of flattening on the obverse, besides the all around worn quality of the coin, in that particular area. I was thinking it could be a counterstamp of sorts, as I have coins from that era with counterstamps, but not in this design.
That was another thing I thought of too. I put it under a magnifying glass and didn't see any lettering. I doubt it'd be that small to fit under that zig zag, but who knows.
I will add this, the coin is quite worn. Some details can be made out (reverse looks better than obverse), but this coin has seen quite a bit in it's life, so hard telling where it came from.
Looks like a pattern counterstamped on it. I can't imagine what it represents though. If this were a counterstamp, the coin wouldn't necessarily show a flat spot on the obverse because the pattern appears lightly struck. Bruce