You're pretty close, the letters on mine measure out at 7/64" which translates to 2.80mm.
I have seen some with larger lettering though. My understanding is that the letters vary, same as the grooves in the grenade bodies, depending on where they were manufactured.
Don't ask me which is from where, I'm not nearly that far along yet in my understanding of all of the Hales Grenade's vast nuances.
If I had to hazard a guess... I'd say the lettering was rolled on, maybe even at the same time the lip was formed on the ring. The letters are too perfectly aligned and spaced to have been individually punched onto the ring. The letters were probably placed on a specially made wheel that either spun the ring, or spun with the ring as it/they turned in opposite directions like gear wheels. Maybe it was hand driven like those penny presses at amusement parks and tourist sites. All of this is conjecture of course, but it's fun to play "How'd They Do That?".
I hearby challenge
teecrooz (that's 'Mr. Hale's Grenade' to all of you not 'in the know'- who is also in the running for 'Mr. Balance Pipe', but that is neither here nor there) to track down the tooling that was used to stamp the lettering on the Mighty Hale's Grenade's Windvane Ring!
I've also hypothesized that the ring may have been heated to make it expand, put in place on the fan blade, and quenched to shrink it in place. Or that it was rolled or put in a press to swedge the "emitter end" in place. Though I think there'd be more physical evidence on the inside of the ring from it being compressed into the fan blades if that was the case.
There's actually two "lips" on the ring...the super obvious one that acts as a wind scoop on the grenade body side, and an ever so slight curling of the edge on the rifle rod side. The larger groove around the ring creates a ledge on the inside of the ring on which the fan blades butt up against, and the smaller lip grabs the fatter, bottom edge of the fan blades on the rifle rod side, securing the ring onto the fan section.