Possible issue with my Explorer II?

[KeithRVA]

I just bought a 40mm white dial EXPII from a reputable AD. It is pre owned, part of their "estate" collection. I'm not worried about its authenticity, but it has a few years of wear, with a D serial number dating its manufacture to 2005. Today I noticed what looked like a tiny bit of gunk trapped in the very small space between the crystal and bezel. I took a soft plastic toothpick and gently tried to scratch the gunk out.

However, it turns out the gunk was actually shiny polished steel reflecting its surroundings like a mirror. The rest of the area around the crystal looks like matte silver paint! I started gently scratching the painted area and it began flaking off shockingly easily. I started around 11 on the dial, and stopped just before 4. You can see in the photo where the paint ends and the polished steel begins, right between the 8 and 9 on the outer bezel. Again it is in the very small area between crystal and bezel. Has anyone seen this before? I thought maybe the crystal had been replaced with something cheap, but the laser etching is present on the crystal so it looks original.