Morgan, that cut is only on Police Lugers that had the magazine safety. The cut held the end of the flat spring that made contact with the magazine and the trigger...
Here is a combination illustration of the sear safety and a clipped one that is installed on a police Luger.
the graphics are the work of Gerard Henrotin, from his e-book on the Luger Mechanicals. I highly recommend this book to Luger enthusiasts whether they be novices or old-timers. Great Illustrations. You can find the link to download Gerard's e-books on the homepage of Lugerforum.com under his great animation of the Luger firing sequence. His books are easy to download and read on your computer, and they are very inexpensive. Gerard is also a member of this forum.