Hi John,
That is quite a bit of wear. This is sometimes referred to as a “mushroomed” pivot as the bushing has worn a groove leaving the end untouched. This can happen when a clock runs dry and dirty for many years. It’s also possible that polishing or grinding abrasives containing hard particles (like diamond) were used in a past servicing which may have become embedded in the bushing or hole wall essentially turning the bushing into a cutting tool. Whatever the cause the resulting damage would for me be enough to warrant re-pivoting the arbor. It could be filed down with a pivot file, polished and a new bushing fitted to accommodate the smaller pivot but it will be much weaker than when original. Since there is very little power being transferred to the escape wheel it would probably be more than strong enough to function but bringing it back to it’s original size by either re-pivoting or replacing the arbor would be the best repair and if repairing for a customer the correct and only repair I would recommend.
Hope this helps John,
Bob