Leave it be?
I might just leave it alone except for removing any red rust-it will leave a dark spot or a pit, but not look quite as bad. You will probably tell if the barrel was blue when you take it out of the stock. Bottom may still be blued.
Probably worn off from handling. Sometimes just a little wd40 and 0000 steel wool will clean it up but don't need to rub hard till it is shiny! Can even clean up rust speckles on blued steel if you don't rub too hard with the four ought. You could polish the barrel up, degrease it, and apply the cold blue. But I find it is harder to make it even on large surfaces. Maybe you could get better results than me. Or a gunsmith could probably put a glass beadblast matte blue on the gun for not alot of money-does not require the labor intensive polishing. But we are talking about spending alot of money on an inexpensive rifle? I would clean all the dried grease and crud out of the thing and re-oil it to make it safe to fire, assuming that it has no mechanical defects that would mean otherwise. Even dried grease inside the bolt can slow down the firing pin and make for misfires, in extreme cases. Better read up on Mauser disassembly. Likely same as any model 98