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The notation of no lost time is probably just a standard bureaucratic notation the military used on every separation paper of that era.
When a soldier clears a post for the last time each army department signs off they have no claim against him and he should have no claim against them. The quartermaster says he turned in all his issued equipment, the judge advocate general says he had or had not accrued "bad time" and no charges are pending so he is free to go, the paymaster says he got everything he was owed, etc., etc.
The reason lost time is important in the end is it effects the term of enlistment. An enlistment isn't up till additional days/week/months are served to make up for the lost time.
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