The target is damaged in a way that it has been non-uniformly sputtered from a particular spot more than the other area, thus causing a huge bump-like structure and cavity in that spot.
If your target is already now made out of powder pressed into a pellet, your refurbishment plan might actually work. Just dispose the top layer, maybe.
However, if you are using a solid metal target right now, this will not be enough because a sintered compressed pellet still will have inclusions that your solid metal should not have, but in this case you can at least send it to your target manufacturer and get the material value back.
A sputtering target is usually 99.99+% pure. I would imagine impurities would be introduced during the refurbishment process and even 1% impurity could change the properties of your material so i woudnt recomend it.
I actually had a similar problem with the same target before, the damage looks like due to heat generated during DC sputtering. Unfortunately i don't think you can use this target anymore, what i recommend is to contact the manufacture and see if it is possible to get some money back, i would also recommend to get one with a copper plate at one side, moreover the use of RF sputtering would also help to reduce damage to the target.
I agree with José Elias Abrão Neto that this target is beyond usage and saving and would add that this has been used too far. There should always be a bit of remainder, otherwise you will sputter the backing plate and may in the worst case damage your magnetron. If your magnets heat up locally, that may cause loss of homogeneity.
Jürgen Weippert and José Elias Abrão Neto , thanks to both of you. Your suggestions and discussion has helped me a lot to understand the issue. I will go for a new target and will contact the manufacturer on this.