i've made small holes like that on pistons as a result of poorly timed set ups, infact i had a stock a35 jug with a small indent like that, and when the timing was checked it was way off, re-set the timing to stock specs and its been fine ever since,
you could also stack some washers on the spark plug to back it off a little ways,
i've actually had a few different pistons end up like that, as a result of to high of compression or/and ill set timing, a lot of the compression issues tend to also place the spark plug much closer to the piston, which is why backing the plugs out a little seems to help, a lot of the older 86cc v1 kits had similar problems i think, and needed a bazillion washers to bring the plug out