What happened?

I highly suggest purchasing a book on the coining process. It will help you eliminating at least half of the questions you might have.

 

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do you realize that MD means Machine Doubling?

Not Mint Done?

 

Shot with a .22 ???

 

Someone used a fishtail drill bit on that coin.

 

I've been alive long enough to have done that (stupid) thing--and yes it did work.

While a plausible explanation, I would expect the Obverse to also show some type of damage because the torque and resultant pressure required to make that "crater" would surely have also left some marks there.

 

...or burnt the house down!!!