I deal with replacement exhausts at my workshop here all the time, and what that appears to be is just where they have heated it during manufacture cooling and picking up moisture causing a bit of surface rust. That can happen in a day. Having said that, it doesn't take a second to spray these things with protector, even WD40 during manufacture. Depends on the quality of workmanship you like to portray I guess. Summare - probably ok product to use but sloppy manufacturer.