Are you serious? That's how it is built. That's where the extractor runs when you cycle the bolt.Here is another picture, the circled portion has the steel blown out down to a inner cone. The bore is otherwise good and shoots fine but sometimes rifle will fire loudly and pass a portion of the blast into this void. I looked at a few other Cooeys and this seems to b a common issue with older Bolt action Cooey and similar rifles, many have this type of damage. Looking for possible corrective action if possible.
This X2I think you should let a gunsmith examine it and explain what he thinks about it all.