Can anyone identify my weird Japanese note?

I've bought a bunch of cheap world banknotes a few months ago; among the bunch was this old-looking Japanese 1 yen note in really bad condition.



(Sorry for the rotation, it looked normal on my computer.)

The obverse (...at least, I think that is the obverse) looks kind of like the 1916 type, but with some details missing (and others added).
The other side (presumably the reverse) doesn't look like anything I could find at all (it vaguely resembles the 1916 type as well, but with the English writing replaced by something in Japanese).

I'd say it was a modern fantasy, but I can't see any reason why anyone would make it in such terrible condition and then sell it for less than a dollar.
Contemporary counterfeit? But again, it doesn't look very similar.

Any idea what this could be? I know it's probably nothing too rare, but it would be nice to find out what it is anyway.

A Japanese military note from the "China Japanese incident" called Heigō 1 Yen [ND (1938)], in this condition worth hardly anything.

KM: P# M23 ; JNDA: 13-30

Interesting note but unfortunately very little, especially in Japan. Japanese dealers do not want any notes that are associated with the war or the military.

Do I understand it correctly that this is basically the banknote version of "China - Japanese puppet states"?

Not exactly, these Heigo notes were replacing the previous vertical Kogo notes because of counterfeiting. They were not issued for a specific puppet state, but rather for Japanese occupied Chinese territory as a whole, or territory like Hong Kong, to replace local currency. Notes like these were issued for the "reformed" republic of China and were used interchangeably with the military notes.