Yes, getting cuts like that is generally a sign of a higher quality tire. Generally, a softer tire will ride better, have better grip and lower rolling resistance. Those same properties will also make it more prone to getting cuts.
That's the challenge will low quality tires, the tire is terrible and they're impossible to wear out.
I wouldn't necessarily toss it, the cords don't look cut. It's a vulnerable spot, but should make for a fine back tire.