I can't see how a different grade of steel would help with damping vibration. Most of those clever boring bars seem to use damping fluids etc to reduce the Q factor, as they are much lossier than tempered steel, which is presumably what we see here. A spark test would confirm that.
Suspect that may be showing the depth of through hardening due to oil(?) quenching. You need to cool some materials down pretty rapidly to attain the required hardness, yet the material at the core is some distance from the cooled surface and will consequently only see a relatively slow rate of change of temperature. That would leave the core fairly soft and the skin hard. The skin would be a lot thicker than what we could normally call surface hardening which is a diffusion process and generally only microns deep.
If I'm right, you could temper it by heating up and allowing to cool, at which point the hardness would be even throughout and a polished surface would not show that pattern. Obviously you'd want to have checked those 2 regions' hardness beforehand.
This question surely requires experimentation!!
