[Animats]

This is probably where the cuts come from.[1] That's a machine that separates potatoes from rocks and dirt clods by dry mechanical means. Notice the toothed wheels over which the potatoes pass. There are other machines which do the same job more gently by floating the potatoes in water, while the rocks sink, but this one doesn't need so much water.

If most of your product is headed for the peeler and french fry cutter, there's no advantage to keeping the potato skin intact.

[1] https://www.youtube.com/watch?v=Lo3rpXoAH7w