Error knives were purposely created in 2004. It is most likely that a skid of overrun and blem blades was pulled from the warehouse and placed at an LB-7 workstation...pull a blade, a pair of covers and assemble.
There were always more blades made for any special run than were required. As much as 20% to allow for rejects, set-up pieces, warranty replacement etc.
Yes, I am sure there were some regular production errors. We've all seen them. But no, not likely a seven-eight year old blade laid on a worktable for this assembly.
These knives have value to me and some other collectors as curios. If I were putting together year sets of Scrims though, I wouldn't want this knife in the collection. There is one of my oft-shown true error knives which made it past the inspector, out the door and onto a dealer's shelf, then into a customer's closet. He had bought two and put them up, not looking at them until he sold both on eBay, this one to the Codger. It is an X-Timer with the handle installed upside down (or the blade, as has been suggested).
Michael