That looks like a crack, clean up the inside and get a flash light and look in there and under the dovetail. It could be something the builder scribed on to show you the slide travel limit....hard to say. A quick way to check backlash in the screw and nut is to assemble it and push and pull the slide at different sections of the screw. You can put a dial indicator against the slide and push and pull with your hands. Or just read the lost motion of the feed crank. The scraping looks pretty dismal. What brand lathe is it? Made in China I suspect. No oil groves either. Use a stiff paint brush and clean the screw. Look at it all along the the screw and see if the pitch or threads all look the same thiickness. Look at the gib screw too and see how the head fits in the slot. The cross side is probably high in the middle and rocks like a rocking chair because there are no wipers, no lube holes and grooves. The scratch looks bad too on the top slide is a sure sign chips got drug under there with no wipers. Also lack of lube can cause scratches. . Measure it up like Keith Rucker does in his show, dowel pins, etc.