A couple of comments, Mark:

I don't recall ever seeing a H&C chip cancelled with this design.

Every cancelled chip I've seen had the cancel visible on both sides so I couldn't be played; either drilled through, notched on the edge, or hot-stamped on both sides (usually with the Paul-son sunburst or the indian head).

I'm not sure why they would be doing a setup to stamp the circles you show, but I'd be inclined to call it a "setup chip", getting the machine ready to stamp chips.