Ive made several steel targets.Dueling trees ,poppers and swingers.I always angle plates 20 degrees towards the ground.Pocked steel is the wrost thing to shoot at.You can get away with 3/8 or 1/2 mild steel for light load pistol caliber rounds but for .223 and larger Ar 500 is the way to go but its not cheap stuff
Cratered steel act like a parabolic dish redirecting the fragments back at you. Watch some high speed video of bullets impacting steel and imagine what would happen if it hit a pre existing crater.
AR500 steel, angled down with a bit of give in the mount are your best bet.
GC