I would not submit it for grading. Proof coins are sometimes broken from their holders and spent. A proof coin in that condition is worth 25 cents - it makes no sense to pay $10-$30 to grade it. If it were in mint condition, it would be worth about a dollar.

I get one in pocket change almost annually. S-mint proof coins can be silver or clad; I have only gotten clad coins in circulation (I do get regular pre-1965 silver quarters on occasion, but not in the past year)

It's a novelty, but unfortunately not a valuable one.