My guess (no more than that) is that this is an attempt to deceive, in a region with numerous different currencies and languages and at a time when many more people were illiterate than now, and in a context where the UK sovereign was regionally important for trade.
Nice scenario, but it has weak points. Yes, there are many different languages in the region, but they are basically spelled the same way, with varying choice of words or construction of sentences, but readable everywhere. This is because it is a religious requirement to be able to read the Qur'an, which in turn makes illiteracy much lower than in Christian dominated areas. That again leads to the observation that while in Christian dominated areas there are indeed plenty coins that try to abuse the illiterate, I am not aware of any in Arabic writing that do this (there are imitations, like the khaccha pice, but they are also deceiving the literate).
Your point on the domination of the sovereign (and presumably its divisions) is valid, though. There are examples of gold coins of the same specifications, some official, some less so, that saw circulation in West Asia. Some have indeed a "fake news" denomination or date and many delete the offensive portrait of a British royal. Possibly, this piece tried to masquerade as such a replacement sovereign division, but it would have had little chance of going very far, as the gold trade was dominated by jewellers, who would not have been deceived easily.
Perhaps more likely, the piece was sold as latter day clothing decoration to those who could not afford gold. This fits in with local culture. Other such pieces also have a funny date. Many bear some resemblance with an existing coin. This one goes back one step further, by combining elements from different coins, making it look like a coin, but being highly defensible as an imitation.
That leaves the counterstamp. Though I have wondered why it doesn't say "falsch", it may be explained by the fact that many Iranians fled to Germany after the fall of the Pahlavis. One may have taken along this piece, hoping to cash in on gold at a German bank or gold trader, who saw it as his duty to apply the counterstamp before returning the piece to its owner.
Peter