I am with Mark and Butlersrangers on the looks of a blued Krag. Another thing is the case is not very thick on a Krag sanding out the surface will only make it thinner. The metal under that case has been described as "butter soft", I have not drilled one myself, but have heard several accounts. Your modern case hardening steels have tremendous strength in the core or when "mock hardened' without the additional carbon in the skin. The material the Krags were made from probably softer than 1018 or other mild steels available today.

The men that heat treated at the arsenal had a lot of practice doing it. The Krag action has relatively heavy sections and knife thin sections any one trying to color case a Krag today would need to be real good not to ruin it.

I have made heat treated commercial screws that needed plating and the plater mentioned having to treat them right after coming out of the tank to prevent hydrogen embrittlement. We have also sent spring tempered parts out for bluing and never had the plater mention any need for post bluing treatment. I do not know all the bluing processes but I do not think any have an issue with embrittlement.
FYI the treatment to drive out the hydrogen is just soaking in an oven at about 300F for a while, not really a big deal if you do not forget to do it. It probably needs to be done quickly to prevent cracks from starting. Not an expert so I do not know how long you have to begin the treatment.
Just in case you think we all hate bluing, I did have my dad's 1917 Enfield blued.