Notched feeling due to indented races is not abnormal for an aged headset, depending on the headset one can use loose bearings to replace caged or vise versa to smooth out. For me the real questions would be, Is the steertube bent? Does the headset feel loose at one point, and bind in another when rotated 360'? Another check is to roll the steertube on a flat surface.

Alignment needed on an old fork is not uncommon.