Yep it's been peened.
Lot's of inconsistencies in the quality of Russian capture K98 rifles.
Some are very nice while others are nothing more than scrap parts cobbled together.
Ya thats a bummer, its still a k98!
My Russian capture is one of my favorites and I paid $300 for it 2 years ago and its a DOU so its not even true german but with a bore shiny as a mirror.