Nice picture. Here are a few more related to military dadao scabbard use. Relatively speaking many pictures can be seen with organized forces using similar leather scabbards. This is an area that has useful photographic evidence available. Although it does not really clear up the original question of the hole in the blade. It does speak to the fact that a highly mobile group needs a means to transport their weapons. Its not a great stretch to consider the less a person moves around, and or needs to carry other gear too, then there could be less of a need for a scabbard. Just a thought, and also relative to what Tom mentioned about the use of no scabbard at all.
What would be great though is an old article or excerpt of one describing an armed non governmental group, or a photograph of possibly a civilian defense group carrying weapons similar to what we call "village" type swords that often have the holes in question. A foreigners snapshot of say a "Red Spear" group coming through town would be very interesting. No doubt this information is few and far between, but it does surface in little bits at a time. With the help of like minded friends of course