1918 Germany is not 1945 Germany; German mfg quality never dropped dramatically during the Great War, they did do significant substitutions in wood though I have never come across a 1918 dated type II like this, - I own half a dozen 1918, owned dozens more & seen hundreds over the years and I doubt this is how the grips were issued.
1915 type II usually have nicer grips though all I have seen have a similar appearance with some 1918 perhaps slightly less attractive/finished, nothing as dramatic as this example though.
The 2nd to last pictures shows some abrasion- imo mostly from sanding the rust off the cross piece w/o removing the grips?
IMO this is a chemical cleaning result though from pictures I can only guess. I have seen such results on rifles all the time, my interest in the Gewehr98 & 98a and this harsh cleaning of stocks looks much like this on your grips.

Personally I never try to “fix” chemical or sanding as it usually makes things worse… replacing the grips is a possibility though fit is usually a large problem (rarely worth it if the grips are decent enough & original to the bayonet).
Herder/EIG is a good mfg and I would keep it as is until I could upgrade it, - if you try & fix it you’ll probably make it worse and make it harder to get good $$ out of it, further if you alter it you’ll make it worthless in a trade to a knowledgeable collector and you won’t be able to use it in a trade.