Small rounded crease on top of banknotes

This has probably been asked before, but I couldn't find anything on it. Does anyone know why so many otherwise-uncirculated banknotes have this weird round crease at the top-middle of the banknote?

Just curious if it's something that happens in manufacturing for many of these polymer or Hybrid substrate banknotes (most I've with this are from the De La Rue printer) or something with packaging and distributing, or people skimming through straps of bills with their thumb, but either way I'm not sure.

Here's just 2 I've seen it happen with: N#335303 and N#205672  

I have a few in my collection like this that are in otherwise uncirculated condition. I'm new with grading banknotes, but would they still be considered UNC with a crease like this, or does something like this not matter?

Just curious if anyone has any insight on this.

Maybe something due to this process?

Possibly, that was one of my guesses, just not sure how that shape would happen on every banknote, unless it was some machine with that shape to seal the straps on. Definitely could be

Just brainstorming. I have no idea.

These are called cutting cups! @gyoschak  explained these well in a swap that we had earlier this year: “A vast majority of cutting cups occur on paper notes with security strips. The blade that cuts the sheet has difficulty pushing through the much stronger metal strip, and a “cup” can form there. The notes are still UNC, because that is how they leave the mint. On some issues, it’s nearly impossible to find any without a cup. Those that do exist carry a high premium.”

Ah, I see. Thanks for the explanation! Gyoschak is very knowledgeable with banknotes, I should have known to ask him, lol. Good to know they are still considered UNC and I shouldn't change them to AU on my swaplist. Very interesting though that there's hardly any way for them to avoid releasing them like that, seems like they should find a way to solve that issue. Thanks everyone!

freeze_coins

Gyoschak is very knowledgeable with banknotes, I should have known to ask him, lol. 

I’m not an authority or an expert, it’s just a serious hobby for me. (My wife would say “obsession”)

An excerpt from IBNS: 

To avoid such flaw is very hard unless you have a bundle to pick your notes from. Those notes sitting at the bottom should be freed of this or may have a minimum dent. I am aware that many collectors dislike this kind of flaw and I have seen banknotes been ironed to reduce the effect of such dent too. 

Nearly 3 years ago, I replied to this thread on Guide for Grading banknotes started by @rejero.  I probably should have linked this PMG Grading scale but attempted to answer the question myself.  

On September 18th, I replied to @moneytane's grading summary simply because he considered cutting cups to lower the note's grade to AU (Almost Uncirculated).  According to our certifier from BCS, if notes haven't entered circulation & cutting cups were part of the printing process (caused by the resistance of a security strips during the machine cutting) it may lower the UNC # but the note should still be a level of UNC (so perhaps not “choice” or below 63). 

The thing is - if the note hasn't been circulated then it should remain UNC.  I have rarely seen a cutting cup that is so dramatic its distracting but I suppose they're out there.