I am not quite sure why they were put on. I think it is mostly for looks. I agree that it would most likely hinder chopping and slashing performance with those deep serration scallops. It does look cool though!

why do you think it would hinder chopping performance?
on my kabar with serrations, the serrations bite deeper.

I guess it could just be geometry, or where they're located but I would think less surface area would penetrate deeper.
???

I think serrations are horrible for chopping.

1) The serrations might bite deeper, but that doesn't mean it'll chop better. When you chop, it's generally a 2 step chop, one chop on the left and one chop on the right, and the piece in the middle should be flying off. The flat blade makes a clean cut, whereas the serrations would keep the wood intact between the gaps of the serrations.

2) I can see the serrations breaking, chipping, rolling, and denting real fast under heavy chopping.

3) Makes the blade lighter up front.

There's probably a lot more reason why serrations isn't ideal for chopping, which is why you never see serrated hatches or in many choppers.

Probably the reason why your kabar bites better at the serrations is because the geometry there is thinner than the rest of the edge.
Given the same thickness I just don't see how a serrated edge would chop better than a plain edge. The serrated edge actually has more cutting surface to bind and give resistance during a chop. They also cut at different angle in relation to the straight edge portion. Slicing and shearing motions on softer material may be a different story depending on how the serrations are done. A stock AK already has pretty thick geometry at the edge. Putting scallops that ride higher up on the edge will only make the edge thicker. Now I can be entirely wrong here....but if I had to bet I would put my money on a plain edge for chopping performance.

I'm guessing that wasn't an AK, but the one of a kind Dragon's Fang, the biggest piece of INFI ever. See the size compared to an AK?

http://www.bladeforums.com/forums/attachment.php?attachmentid=70791&d=1177177290

http://i234.photobucket.com/albums/ee132/gusthefish/DSCN3497.jpg

WOW that first pic is awesome.