[I have edited this post yet one more time to correct several errors in my original reply and to simplify things.]
Sorry, I have a bad problem with getting things completely done, and in a timely manner...

The top stamp, US #707, is normal, other than some of the perf holes at bottom are not completely punched out.
Basically, you have a normal stamp from the bottom of the pane, with a bottom selvage attached. The wavy bottom edge is caused by the guillotine blade. I do not know why the guillotine blade used in the production of this stamp has a wavy/serpentine shape for that edge and not a straight blade. It happens on many other issues of that era as well. For small size stamps with the same orientation as this issue, the wavy edge appears at the top/bottom edges of the full press sheet, while the all other cuts are straight.
The red line you see at the bottom, is actually NOT the top frame line of the stamp below. If you look at the left/right ends, you will notice it is wider than the stamp frame. That long red line will either be a guide line (between the panes of the full press sheet) or what I call an ink line (appears near the ends of the flat plate). In this case, I would say it is an ink line. The guillotine trims the press sheet around that ink line. Sometimes the cut is off and you can see the complete line, as in the example below:

Hope that explanation makes sense. I am subject to correction on my statements.
These comments only apply to some pre-ElectricEye issues.

k