I edited and retracted my earlier statement. I didn't intend to add any confusion or misrepresentations. I looked at the coin with fresh eyes this morning and the other posters have some points. I was a bit hasty in my assessment of this particular coin.
I would say damaged. Lincoln's bust is flattened from the punch or press, the lettering around the periphery is untouched, this would not happen with a capped die.
Sorry about my statement and adding to the confusion. I was hasty in my earlier statement, it was late, and I didn't get a good look at the coin like I thought I did. I must digress to what the other posters stated about this coin.
Feel free to e-mail Fred Weinberg . . . .he's the world's lead authority on error coins ~ [email protected] ~ I'm sure that he'll tell you that is is NOT a true mint-made error coin, it was damaged outside the mint.