I've recently restored a very nicely preserved Peugeot classic bike with their own 103 tubing. It all went as planned until one of the very last things I had to do. When mounting the rear brakes onto the frame, they seemed to not be fastened enough even though I used quite a bit of force, so I tried to use a bit more. Unfortunately, I noticed a crack in the paint layer at that point and immediately unscrewed the bolt. The paint around the crack flaked off when I wiped over it with my finger. There is no crack visible in the steel itself, but you can see it's a bit squished. Of course, I was very devastated to damage otherwise almost perfectly preserved frame, but now I've also started to worry it might cause a frame failure in the future. I've tried to attach the pictures but the forum wouldn't allow me because I'm new. PS. what do you recommend I do with the exposed area? Will it decay if I don't protect it somehow?

Examine it for a crack. It is likely that the steel got deformed enough to cause the paint to break away from the steel and that the paint flaking is the only damage. If so, use Testors model paint, Rustoleum, or even nail polish to protect the paint.

If there is a crack, then it is another story. The brake bridge would need to be repaired or replaced.

Welcome! Many brake bridges are just round tubes running between the stays with no reinforcement for the brake mount. Most manufacturers use brake nesting pads to help distribute the clamping load on the bridge. If your brakes do not have these you might want to find a couple. The ones for the front have a gentler curve to accommodate the larger radius curve of the fork crown.

Picture(s) needed for any valid specific response.

My Peugeot from the '80s with Carbolite103 tubing had braze-ons at the brake bridge that were flat on both sides, negating the need for curved washers.
Who knows what the OP has until more info is provided?

Thank you both! I examined it again and there is no crack, just a slightly squished tube. I removed all the flaking parts and will follow Velo Mule's recommendation to protect it from rusting. The brakes do have the nesting pads, I guess I just forced the bolt a bit too much. At least I learned a valuable lesson... Yes, I took some pictures, but I need to post at least 10 times before I can add those, unfortunately.

The brake bridge is in my case a narrow horizontal tube. It is a Peugeot PBN 10 from the early '80s.