This rifle was probably purchased for about $15 after the war and it made sense to alter it for hunting and re-sell for about $80. It may have been proof-tested by the gunsmith and determined to be safe enough at that time. Gunsmith time and machine costs were probably about $8 per hour when that was converted, but it's plausible that he did it for re-sale, or for his own use.
Fortunately, people these days have access to relatively inexpensive new rifles, so it doesn't make much sense to repair and use the particular Jap barreled-action in question (except for bragging rights). For instance, Ruger Americans are being sold at discount sporting goods stores and Wal-Mart for less than $350.