I agree the cause is someone pushing the baffle down. I just saw the same thing on my 1ZZFE 2004 Vibe engine. I was changing the valve cover gasket and noticed the cut as I cleaned the valve cover.
On the cam there is a toothed "gear" with about 4 or so square "teeth," that rotates and contacted the oil baffle as it rotated in front of the end of the cylindrical sensor visible in the photo. The edges of the "teeth" are square and relatively sharp, very likely made of steel to trigger the sensor, but I did not check.
There is a bend in the baffle from the factory which is visible in the photo. It is probably there to speed the oil fill process.
I did not see a pile of metal shavings below the cut, so the damage must have already been done long ago, the "teeth" made clearance, and the cut stopped growing and the debris was washed into the oil pan.
My fix was to bend the oil baffle up away from the "teeth" so that it could not hit, and pull off a few splinters, like in the photo. It was easy to bend the metal back with the valve cover off, for you to do it from the top, use a strong hook, maybe made from 1/8 in dia rod, or a long hex head bolt, or carriage bolt.