I think that your suggestion of a tooling location hole is the best suggestion for the presence of this small hole that has been put forward so far, Peter. The problem with punching out a part like this with the large, in relation to outer blank, muzzle ring hole and the blade slot is that the finished part which drops out of the tool tends to be dished shaped/distorted. This dishing can be difficult to remove and thus obtain a flat part again. The cross guards which I have seen all appear to be very flat with no sign of dishing.

A way round this problem, in the 1940s, would have been to punch out just the outer profile of the cross guard and then to drill/bore the muzzle ring hole plus machine the blade slot. To do this it would not be necessary to have any holes actually in the cross guard in order to locate on a machining jig because it is perfectly normal/acceptable to locate on the outside of the blank using pins. Today a part like the cross guard would most likely be cut out on a C.N.C. laser cutting machine and would produce a nice flat part.

If only the outer profile was punched out and not the complete part then the small hole must have been included during production for something other than tooling location.