Let's get real here...
A new rear 705 is a lousy $86.
Replace it. It's not worth riding in fear or taking any chances for that amount of money.
It's hard to tell from your photos exactly what's going on (need pics from the side to see if there's the bulging of delamination), but that cut, wherever it came from, means the tire is DONE. Replace it PDQ and ASAP.
I had a set of the old bias-ply 705s that delaminated, and the retailer (Motorcycle Superstore) worked with Shinko to refund the purchase price. The radials are great tires, and I've used a few sets on my DL1000 and the bias-ply versions on my KLR650.
In your case, you're not the original purchaser, so the situation becomes a little more murky. Shinko might do something for you, or they might tell you to talk to the retailer first (and you probably have no idea who that was anyway). In any case, do NOT wait on Shinko or anyone else -- the important thing is to fix the safety issue. You can argue about the money later.
2002 Suzuki DL1000 V-Strom, Dark Metallic Space Blue
1983 Suzuki GS850G, Cosmic Blue
2005 KLR685, Aztec Red - Turd II.2, the ReReTurdening
Last edited by bwringer; 05-02-2014 at 10:28 AM.