There's nothing wrong with the steel at all.
It's all quite good.
The clay on a fully austenized blade insulates the steel underneath from the quench oil, which quickly drops the steel temp from around 1500 to well below about 900 degrees in only a matter of a second or two.
If the steel was allowed to drop through that window of temperature slowly, the steel would use that time to revert to pearlite - the condition the steel was in BEFORE you brought it up to austenite.
The clay creates a barrier between the steel and the quenchant, which keeps the oil from cooling the steel off in those few precious milli-seconds, and allows the steel to begin its reversion to pearlite.
Once it starts, it's hard to stop.
Of course, the shallower hardening the steel, the lower alloy of the steel, the faster this all takes place.
Well, simply THICKNESS of steel will do it as well.
Look at the spine - there's hamon there as well.
There's so much heat in the thicker areas that the oil can not get the heat out fast enough to stop the reversion to pearlite - the soft stuff where the steel would rather be.
Notice here how the "tiger stripe" hamon even sort of radiates from the cutting edge in a radial pattern.
This is following the thickness/cross section away from the cutting edge.
I admit, I can not in any way describe why the steel chose to follow this stripe pattern. I am completely perplexed by that.
I wish I knew more.