The photos present different stages of my SOP when restoring auger brace bits. I hope this description will be of use to someone.
Act 1 - Rust
Firstly I inspect the auger bit and here are some questions that you need to ask before spending your time doing work:
Does the snail (threaded point) is intact or is it broken off?
Is it packed with resin and wood dust? Paint or glue?
Are the threads stripped or need a bit of a needle file retouch.
Are the spurs (small wings on sides of bit) grinded off, broken off, filed on outside diameter (Yikes!) or are they in good shape?
Do the tips of spurs reach the bottom of the snail?
Is the bit straight or bend? Do you have means to fix the bend and check concentricity?
Is it badly pitted or the rust is manageable?
What disqualifies the bit: broken or stripped snail, spurs grinded or broken off, filed on outside diameter, badly bent (more than 5°), severe pitting.
Act 2 - Chemical Warfare
I use mostly Backyard Ballistics DIY derusting (chelation) solution for rust removal. I can leave the bits for the time without actively managing the process and even if I forget about them, it does not etch base material. No acids to be used. Good alternative is commercially available chelating agents like Evaporust or electrolysis (don't use salt in water as electrolyte, it off-gasses chlorine gas, baking soda is better)
You need to keep in mind there will be black powdery residue all over the bit you need to clean off mechanically or by ultrasonic bath if you have one.
Act 3 - Elbow grease and shoe polishing
To bring the bit to completion, I mount in the vice (I made a special taper square socket but you could use two pieces of pine to clamp it, it is soft enough to make the negative of the square shank) use ScotchBrite abrasive pads in order: Maroon, Grey and Yellow (corresponding to #320, #600 and #1000 grits) cut into narrow strips to get into nooks and crannies of the bit. I polish it with motion how you would polish a shoe with a rag. When that step is done I sharpen the spurs with auger bit file and touch up snail threads if needed with knife edge needle file. After a bit of research I think the metal rifler file would be better in sense it has closer geometry to snail thread profile. Lastly, I oil the bit with rag soaked in Ballistol (or 3-in-1 Oil or WD-40, whatever you have access to).
And there you go, you can see the progression of each step on the pictures attached. If you have a different approach or methods you use, I would appreciate sharing.