It's actually a decompression device/trick,I've seen other large 2-strokes with the same thing,it's so people can more easily pull start a large cc motor. Toro had a H.D. lawnmower with a big 2-stroke motor and it had exactly the same thing,so Joe Home-owner could easily pull start it.
Not a performance thing at all. If you raised the whole top edge of the exaust port to the top of that notch you would get a huge power gain(From having more exaust duration,like a performance engine),IF it had any compression left after raising the port.(over 100 or more psi).
Do a compression test,see what it has now,hold the throttle open but don't pull the motor over too fast so the decompression notch is doing it's job. If the motor has a removeble head,or you did some other minor machining,you could regain or increase compression if raising the port lowered the comp. too much.If it's easy to still raise the comp. after raising the port then you could do the mod if you wanted to.
If you don't want to experiment on it then better leave it alone.