Look at the disk inside to see if there's not a circular notch, if there is, consider the disk dead

If the magnetic disk is broken and you wish to conserve the disk shell for it being something original you don't wnt to part with, you could opt to try to replace the magnetic disk with one from a spare floppy disk of the same density.

The circle of caused by the read/write heads scraping part of the top layer off of the disk. I've seen this happen to optical disks as well (RIP 98FE original disk 😵 ).
Replace that FDD right away and stop using it. It's probably broken if it does this. I don't know if such a FDD can be repaired and this also depends on if the drive is worth repairing.

It depends of the condition of the disk and the condition of the drive.

A brand new drive can do that to crappy/nasty floppy disks that didn't age well at all, and a bad drive can do this to brand new floppy disks. However, nasty disks that deteriorate in the drive tend to make the drive to go bad. However a simple cleaning can often save it.

So yeah, whenever a disk gets marked by the drive, trash the disk and clean the drive as well. The drive keeps doing that, trash the drive as well

The disks were working new old stock written 1x time. No easily visible circles but I believe this is the only rational cause. I Replaced the non-working floppy drive that did this to disks -> "unable to read" and when trying to read it caused this to disks.

These circles aren't always easy to notice, sometimes even floppy with circles will still work fine, it's just a matter of luck I guess