I may be wrong, but IIRC, the case is partly drawn and the head formed with a rim to help handling through the forming and head stamping process. Then the case goes to the cannelure machine where the rim is turned off and the groove cut. I have no idea how that round skipped part of the process, passed inspection and was actrually loaded, but it goes to show that one should ALWAYS inspect each round before loading if the gun will be used for a serious purpose.
FWIW, the .32 ACP and .35 S&W cartridges are not interchangable; the .35 won't fit a .32 chamber and while the .32 will chamber and fire in the .35 chamber, it is not the correct cartridge. The later 1924 model was made in .32 ACP - there was no .32 S&W Auto cartridge.
Jim