Hi Stuart
I have seen much worse but in my book that would fit the definition for a set spring and a candidate for a replacement.
Best test would be a trial run after servicing. If the pendulum or balance wheel has good swing or motion and the timepiece runs the full duration then might get by for a while with it. If it’s a repair job for a customer then I would replace it. I know that’s more information than you asked for but after a couple of glasses of wine I can get a bit talkative!
I hope this helps. Best Dean
