Hey Battara!! I was hoping you'd come in on this!
The symbolism of the eye is indeed key on these sacrificial weapons and thanks for adding the detail on Durga. What I'm wondering is if every ram dao was sacrificial, and how widely was the ram dao (realizing of course degree of variants) diffused?
Although as Tim notes, this item is too small for effective chopping, it is still of a size for close quarters slashing. Then if intended for such use, the question on the unusual crenallations arises again since that would suggest ceremonial use. Truly a conundrum!!