Usually very bad acme on the face, especially on foreign people such as Asians and Mexicans. The skin have dents whihc go inward into the skin which making it like small craters on the face hence the word crater face.
When somebody has the little holes in their face (from acne scars) that resemble all the craters on the moon
Person 1: "Bro you really should take care of that acne before you get moon crater face"
Person 2: "Yeah, my brother had moon crater face and was taken away by NASA"