It is a good thing, as far as I am concerned. I have an M2 that still has the crest and it is very close in condition to yours. My M2 has the back frame halo, but the barrel has a DWM barrel inspector's mark indicating replacement or rework of the barrel, so my barrel "proof" does not have a halo. It is unfortunate that your Luger is one that has had the crest ground off because if it hadn't been ground, my opinion is that it would probably be one the best preserved M2s around.
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If it's made after 1918...it's a reproduction
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