My guess: accident damage and they replaced the front panels in the engine bay, and shot them with undercoat or flat black. Sometimes repalcement panels come with a factory primer black coating on them, waiting to be sprayed to match, and some shops just leave the black. Often seen on replacement hoods that dont get the bottom sides repainted along with the top. Re: the cutouts: maybe some amateur cut them out to get spring compressor bits inside the springs? They're definitely a clue to move along to a better car, but ymmv. There's just way too much "wrong" to justify your time (let alone cash) in this one, since you could put the same amount of effort in a better car, and arrive at a wonderful ride much sooner.
My advice: wait for a better 123 candidate to come along. This one shows not just a lack of love, but abuse and ignorant handling. Given the misaligned door hinge (a-pillar/firewall damage?) and other things, you may not ever arrive at a nice example of a 123 with this one...
Rule number 1 in automotive repair should be "do no harm", but alas, we see what happens...