Hugh,
OK, here goes with my best guesses!
Dwight's right (I love how that sounds) about it being a non-reg Berlin Schupo mark. I have never seen one stamped this way.
If oriented correctly, it would be S.B.1.I.2.44. As you note, the Hundertschaft/Berietschaft (riot squad) number 2 overstamps an earlier one, probably 7. Apparently the pistol was transferred between two riot squads.
The 1 in the mark is the same size as the I (4.2 mm) and occupies the position normally containing an abbreviation for the Gruppe (No., S., O., etc.). This is the fourth instance of this I have seen. Here's links to the two others:
http://www.gunboards.com/luger/topic.asp?TOPIC_ID=5453 and
http://www.gunboards.com/luger/topic.asp?TOPIC_ID=3105. As I explain in those posts, I believe these marks were made sometime before the April 1922 marking orders were issued and I speculate that a 1 in this position represents Gruppe West. If correct, this pistol and the holster in the first link were both from the Charlottenburg Inspectorate (W.I).
Sometime between 1922 and 1932, the marking format for the Schupo was simplified. For Berlin, it became just S.B.xxxxx. I'm beginning to believe this change occurred closer to 1922 than 1932. Guns that remained in Berlin were re-marked, accordingly. That your gun does not have the newer mark and does not have sear or mag safeties suggests it was transferred out of Berlin and probably not to a police unit. The similarly marked holster has clear evidence it was transferred to the Schupo in the Merseberg district.
I also note that the S.B. in your mark is a bit larger than normal (about 5 mm versus the specified 4.2 mm). Don't really have anything to suggest about this.
I hope this is of some help. My article in Auto Mag will provide more info on these marks.
Do you live anywhere near Houston? I would love to see this mark in person.