I understand and I’ve seen it as well. However, we are talking about the “safety” of shooting the OP’s rifle which from the limited pics doesn’t look too badly messed with. Looks maybe like a Balkan rework. Having said that, at the high point of my k98k collecting, I had 40+ k98ks in my collection of all flavors. All matching, bolt MM, RC’s, balkans, various reworks, sporters, you name it. I don’t mention this to brag, but in the days of mixing matching RC’s to “make them more correct” I have headspaced every possible combination of bolt to receiver. I still caught the tail end of RCs in crates and I had more money than sense in those days. My point is that I’m yet to see a real safety concern of bad headspace in a k98k be it RC, bolt MM, etc. While buggered bolts, grinding and polishing of external parts may be not cosmetically pleasing to our eyes, it doesn’t mean it’s unsafe to shoot.
To the issue of recoil lug setback, yes it can be a problem if you have it and keep shooting it. Dangerous? Probably not. Will you eventually crack the stock? Absolutely.
Now of course some rifles have serious safety concerns due to catastrophic situations like a dud round stuck in the barrel and then having been fired again. Either way, the Mauser 98 action is one of the safest bolt actions in history.