With the middle stamp not tied at the right end, it may be impossible to prove a chronology of when the tear occurred. Before, during or after being in the USPOD's hands.
A registered letter would be presented at a PO counter for mailing. It is quite possible the clerk accidentally tore the stamp, knew it was valid and continued onward - note the 3 cent is upright and the other 2 stamps are sideways perhaps indicating two different affixers.
Or alternatively, the stamp was poorly affixed at one end and was torn off somehow afterwards - note the open space in that area - but again, the lack of a partial tied cancel in that area makes it impossible to prove much.
Thank you John Becker. I just assumed it was was accepted at the post office because it didn't look like there would be enough room for the rest of the stamp to fit. Sadly, the letter is not with the envelope.
It is not unusual to find less than 90+ grade stamps on covers. Sadly, many covers with pristine stamps have been soaked. I agree with John that we cannot tell today at what point in time the stamp was damaged. Thankfully this item still exists.
This is an example of the eight cent registration fee period January 1, 1874 to June 30, 1875.