basically your disc is scratched and damaged like hell (you already knew that)
even though it's scratched and the data cannot be retrieved piece by piece (which is essentially what a quality scan indicates), it can still mostly be READ (which is what your transfer rate shows)
that one dip may give you a skip on a player, but other than that your disc should be playable. if it's something you care about I'd try to rip it now using isobuster or another data recovery program before it gets worse (if it's even rippable at this point)
this just proves that the people who take the least good care of their stuff (like my brother who tosses cds around the floor of his car) can still play them while people like me end up with coasters from dropping a disc on a carpet it seems
it probably also has something to do with the drive's or the player's error correction capabilities, but I'm not sure how all this CD stuff works.
i just know that I've seen some beat up CDs play flawlessly and it seems that's what you have...a VERY poor quality burn/disc surface that is still playable.