soft head [or soft face] hammers [or mallets] are used in a variety of work where you don't want to mar the surface of what you're striking - in manufacturing, tool and die work, machine work for a lot of striking, like seating bearings or punching - many aspects of woodwork, like log building to drive large chisels or wedges .... many uses - heads can be lead, copper or brass and some have replaceable faces, many now are hard rubber or soft plastic filled with BB's to add weight
if you're careful you should be able to heat that with a torch and dress it back to shape, it's worth cleaning up and saving for sure, just use care, lead melts at a low temperature .... I have a much valued and well used old
copper head hammer, use it a lot working on my mill machinery
Bill