Yep, there is nothing really to rub on under there. I can't find any nicks or anything. I checked the other side, it looks fine. It is possible that there was a preexisting flaw in the hose itself?
Here is some info about the proportioning valve, it should prevent a front failure from affecting the rear brakes, this is from the VX shop manual:
The P&B valve contains two sections, each serving a
different function.
The proportioning section of the P&B valve proportions
outlet pressure to the rear brakes after a predetermined
rear input pressure has been reached. This is done to
prevent rear wheel lock up on the vehicles with light rear
wheel loads. The valve has a pass feature which assures
full system pressure to the rear brakes in the event of front
brake system malfunction. Also full front pressure is
retained in the event of rear brake malfunction.
The combination valve has a pressure differential
warning switch which is designed to constantly compare
front and rear brake pressure from the master cylinder
and turn on the brake system warning light on the
instrument panel in the event of a front or rear system
malfunction. The valve and switch are so designed that
the switch will latch in the warning position once a
malfunction has occured. The only way the light can be
turned off is to repair the malfunction and apply a pedal
forced required to developed line pressure. The P&B
valve is not repairable and must be replaced as a
complete assembly