I'm stumped as to what grade this watch is, and what to make of it.

It appears to be a 0s 7 jewel Openface SBWC watch. The serial number is 671597.

Pictures available at the PWDB link to this watch

It has the bridge style of the Model 1 and Model 2, but the Complete Price Guide to Watches heavily implies that all Model 1 and Model 2 0s watches have serial numbers below 659,700. PWDB agrees that the Model 1 serial range doesn't work. There are a number of Model 2 serial ranges on PWDB that would appear to overlap, but the bridge layouts don't align. The Price Guide doesn't list an ungraded 7j OF 0s watch, but that could be an error.

101 has the wrong bridge layout.
103 has the wrong serial number range.

In the production list of serial number ranges, this serial falls into simply "O.F." grade, 0s, Model 2, 7 jewels.

What is one to make of this watch?

Slightly more direct link to pictures at PWDB

That is a hunter movement without the seconds bit, with an open face dial. You can tell because the 4th wheel isn't directly across from the winding wheel. I have no idea about the rest of your questions.

Interesting. The plot thickens. This serial number does fall in the official catalog as being simply "O.F." without any other grade indicator.

The runs on either side of it are 7j 0s Hunting, and this serial is 3 from the end of the "O.F." run. Maybe someone on the line was getting cute?