I can ask for you next time I go there but from an educated guess, it looks like the surface wasn't properly prepped. I had this problem on the running boards of my mid 90s cal look vw beetle because the shop didn't buy the aluminum etch chemicals (then they did an Acura NSX a few weeks later and had to buy it for that, as it is a premium car, heh), I ended up getting them powder coated but then they didn't match and it looked weird so then I had them painted on top of the powder coat but I never put them back on the car.
Sucks that the late model S197 has so much problem with that hood. Well, underneath my factory hood there's a very small amount of peeling somewhere under there I saw but the entire top is perfect, just has some rock chips. I own two hoods for my S197.
And going way off topic here, but this reminds me the decklid on my beetle had old primer applied so it even bubbled and I had to have it re-painted too. But yeah it's steel.