As indicated, the cut secured the end of the magazine safety spring. When this inconvenient device was removed, many police Lugers were refurbished, the slot for the spring welded up and the weapon refinished. This rework was quite frequently well done, so the weld is completely (or almost) undetectable. All that remains is the "hole" in the frame, which was a bit too large to weld shut.
A totally intact magazine safety is a bit scarce to find and causes police Luger collectors to lapse into uncontrolled drooling and abuse of the family grocery money.
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If it's made after 1918...it's a reproduction
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