I haven't seen this before. I don't see any way the axle could wear away that much steel. I'm going to make a wild guess. I think it was filed away deliberately in a ham bone effort to center the rim inside of the brake pads.Which is a shame since there's a user friendly way of doing that short of having someone with the skill and tools to realign the frame. There's a washer on the brake that's curved to fit the small mounting tube on the frame with a channel on the other side to hold the spring. If you rotate that washer 180 degrees so the channel is away from the spring and only the flat part of the washer is against the spring, it allows you to tip the caliper and center the pads to the rim. The channel isn't necessary to hold the spring. Works fine.