Before worrying about where the insert came from what size and shape is it? Inserts come in bewildering variety because they are race tuned to suit industry whose goal is to remove metal as fast as possible whilst getting a good finish at the same time. Usually means a fast powerful rigid machine with the insert carefully chosen to match the material. Typically inserts are driven much faster and deeper than a hobby machine can manage, and the effect is spectacular – rather than producing swarf in spiral ribbons, smoking hot chips come off in a spray.
To get performance inserts are rather blunt and the finish improves with more speed, faster feedrates and.deeper cuts, which isn't always possible.
On a slow hobby lathe, it pays to use inserts of the sharper type, which is why Dave suggested using an insert desiged for Aluminium on mild-steel -being sharper they work well on steel at hobby speeds.
Ordinary mild-steel tears and smears rather than cuts cleanly – rather like the photo. Some steels are worse than others – always suspect the material when poor finish occurs on unknown scrap. I usually cure poor finish by cutting more aggressively, but this undermines another trick, which is to sneak up on a dimension by taking fine cuts. For that a sharp insert or HSS tool is better.
I prefer inserts but they take a little getting used to. HSS is more forgiving but you have to learn how to sharpen it.
Dave