Cross bore / Latch bore cosmetically ugly, is this fine with it sticking out

I just bought a new construction home and noticed the builder did a VERY poor installation on the entry door in regards to the cross bore/latch bore where the door knob latch is. Will leaving it like this (in the pics) impact the mechanism/ performance of the door or am I fine leaving it as is? I’m guessing I can use a spade (drill) bit to enlarge the bore but I’d prefer not to… as I may make it worse.

The knob locks opens and does everything it should, it’s just bothersome to look at.