I am not saying I know exactly how this coin was damaged, but the raised bubbles on the coin indicate that the the clad layers are separating from the copper core after being heated up in some way. Could be a fire, sitting on top of a wood stove, heated with a torch, etc. There are a lot of ways a coin can get damaged. Coins will not always loose their shape after being heated up and any discoloration that may have been on the coin could have been cleaned or worn off when put back into circulation. Whatever happened to this coin, it is not a mint error.