To add a bit to what Puff said, regarding bubbles:
I said 'air', but really it's carbon monoxide or oxygen, and they occur for a variety of reasons - undercooked ingots mostly (the melt has not reached equilibrium), but since liquid steel can hold more gasses in solution than solid steel, you can find porosity occuring during solidification too.
Regarding cracking, it can occur from working at too high or too low a temperature, or pushing the material too fast - the as-solidified grain stucture needs to be coaxed into a finer, more forgeable state. Impurities in the steel (oxygen, sulfur, phosphorus etc.) will precipitate out at grain boundaries during solidification, and can cause cracking too.
Forging temps for wootz are not high enough for cracks to get welded back together, so they don't go away. As Puff said, "Any flaw appear during forging stage can be easily work around by either trimming out or shortening the piece", and that's how those one-sword ingots get to be multiple-knife ingots.
I have some ingot slices that demonstrate most of the flaws you can run across, here's one ingot with some probable CO bubbles - cube is 1 cm for scale:
This ingot also suffered from too much intergranular oxygen and proved to be unworkable, after a lot of work!
