Here are some photos of an engraved Luger, not mine unfortunately, rather typical except that it's a Navy, which is rare. What bothers me about the OP's gun, apart from the crude inlays already mentioned, are those ill-fitting wooden grips. All the engraved guns I've ever seen have either ivory grips (real or faux) or elaborately carved wooden ones. I have two theories:
1/ This gun was originally fitted with genuine ivory grips which had to be removed because of the Federal prohibition.
2/ The original grips were carved with the initials of the original owner which didn't jibe with the Captain Reith narrative.
Norm
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