I normally only see that type of "Powdering" from alluminum/alluminium alloys, believe it was called pitting corrosion. Could be from the soldering points at the mod contacts, some errant soldering flux not burnt off or cleaned off, which can be corrosive being a bit acidic, especially when heated, thus its usage in soldering to etch into the metal for bonding. Personally myself only I'd take the mod apart to check, though this will void your warranty for return so not suggesting it for you to do yourself if you intend to return it. The batteries shouldn't be corroding like that, depending on the material, but I doubt the metal could be alluminum as it is very weak against corrosives, which battery electrolites most times can be, and AW's are generally pretty reputable re-wraps, so myself I believe it is in the mod wiring/soldering.
