How weird!
Mine has some very minor yellowish spots around the lid and in the little lines where the stem meets the body, but I have been assuming it's just grime from sloppy oiling. I haven't gotten around to giving it a spa day yet so not sure how easily it'll come off. Definitely nothing to the degree you've got going there.
Is it for sure the coating that's coming off? If you clean it off, are you left with bare metal? Or plain flat paint? I'm just wondering if it's not some sort of grunge that's accumulated rather than being the machine's coating that's failing.
It does seem to be focused on the bed...maybe someone used to sew some sort of vinyl that had chemicals that reacted with something in the coat? It almost looks like some sort of sunburn but I can't imagine sunlight would destroy the finish like that or seems like my gran's machine would have had issues - it sat in full sun (through a window) for part of the day for 50 years and had nothing like this happen to it.
Does it sew OK? I'm so happy that I got mine running, it has such a nice quiet sound to it for being such a steel beast.
I can't figure out what to call this color. When I was a girl I thought it was a light army green, and I still think there's a touch of green in there somewhere.