Howdy... and welcome to the forum! 

Well, to me, it looks like that sight post has been reattached (possibly silver-soldered?), which is not an uncommon thing where cut down rifle barrels are concerned.  What do you think Chuck or Dick? 

As for use, I think this would make an excellent hunting or plinking rifle!  With the proper carbine blade to go with that rear sight, it should be quite accurate.  Make no mistake though, it has only value as a sporter, or for the value of it's parts.  Still, not a bad Krag to have so long as there are no misconceptions.