I agree,I thought maybe a knife had inflicted the damage.Almost looks like someone got too aggressive with a reamer. Pipe mud, pipe cement - a variation using some kind of actual cement to fill in the area, or building up a cake are all options.
The grooves will offer grip to the carbon when you rebuild an insulator. Think of it as an unintended gift.I agree,I thought maybe a knife had inflicted the damage.
Once I get a chance to inspect it I will decide whether to just smoke it or mud it.
I did wonder about trying to sand the grooves out but guess that's not advisable