Since the US mint did make 5 Yuan coins this year, this is likely a legitimate error. It happened in the same way that most off-planchet errors occur: the mint uses large canvas bags to transport blanks or planchets or coins from one part of the manufacturing process to the other. Sometimes, these planchets get stuck in a fold of the canvas and don't all come out when they are supposed to. The cart is then used for the next series, and the wrong planchet falls into the mix. Off planchet errors are fairly common - even US coins struck on foreign planchets like this, since the US mint used to make quite a bit of foreign coinage. The Heritage auction linked sold for $431, so I would imagine this one would be in a similar range.
Awesome find! So was this struck over the Taiwan images or was it blank when struck with the Kennedy dies?
One of these sold for $375 plus $75 buyers premium. But I think that one was AU-55 and the OP's coin is AU-details. Great error coin.