In a discussion last year on Jan Still's Forum it was reported that the purpose of the chamber step is to provide a positive gas seal and thereby reduce chamber fouling. Also, it is a more complicated--and more expensive--to manufacture than a straight-cut 9mm chamber.
Here's the address of the discussion
http://luger.gunboards.com/topic.asp...s=chamber,step
The dent in the case mouth comes from the fact that the ejector is in the side of the receiver extension. As it begins to remove the spent shell from the breechblock it pushes the shell sideways, where the mouth hits the opposite reciever rail on its way out.
--Dwight