Not peeling - crinkling - like paint remover, or some other fluid with a property to soften, expand, and undermine adhesion. Was it primed? It is apparently not alodine prepared. Glycol based brake fluid would do that to enamel paints.
Years ago I had a detail shop use some magic mop-and-glo stuff on my car engine and after a few days it removed the paint from the valve covers just like this. Never found out what it was. Denial.