That's an awfully big hole for a peep sight unless......there are several smaller aperture sights that can be attached to it. The picture of the rifle is showing a sight hood and not the actual sight. I collect Mosin -Nagant rifles and the sight itself is just a post that is inside the hood on tip of the barrel. An aperture sight would be on the rear of the rifle nearer the shooter. I have removed the front hoods and replaced the front post sight with a taller post made from a cut off and blued finishing nail when I want to shoot one of my old "Monsins" at a hundred yards or less. The original military sight post is too short.
I have seen objects similar to the one in question on old hasp type lock hinges. The padlock is inserted through the hole and snapped shut. I think it is likely part of a door lock hasp? Monty