There was an exhibit on coins defaced for political reasons or for the sake of art (or both) at Cambridge and then Toronto, which I attended. I added the catalogue of the original (and larger) exhibit in Cambridge to our Numista library. A very nice book.
From the point of view of the coin as a circulating issue, it's a form of PMD, but this is too broad a term since it's nothing like a coin damaged with a hammer or a vise.
If this were added to the catalogue, it would go in the Exonumia section.
I've seen it (or possibly similar counterstamps) on eBay quite regularly. Since it's a private counterstamp —a fantasy item— it's not worth very much. Still, the maker was careful to make sure the obverse would not be damaged in the process. The force required to stamp a large punch into a piece of metal is very high. I suppose the underlying surface was specially prepared, and perhaps the coins were heated before the application of the stamp? Too much heat, however, would make the obverse very soft as well.
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