The vov above. There are poskim who passel the vov above and say it's a shinuy tzura (pey pshutah).
Five questions - feel free to answer in comments:
1) kosher as is (but fix a bit by adding ink)?
3) shailos tinok?
4) lf shailos tinok, do you cover the other letters?
5) If possul (or tinok reads incorrectly), can I repair? I should think yes, because its the last "shem" of the tefillin, I could scratch back to that vov and re-write the last 7 and a half words (parts of letters at least). I would not think it would be mechikas Hashem to erase.. if its a pey....)