We sometimes see the top of the pallet bridge ground down so that the balance wheel doesn't rub. This is actually pretty common, unfortunately, and this watch is a prime example. The original finish is gone for good.
The correct adjustment is such a case would be to true the balance wheel. It's an important general principle of watchmaking never to alter a good part to correct for a problem elsewhere.
This particular watch movement is a 12 size Elgin grade 303.

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