My brother's 2005 Sequoia had this done. His frame was clearly defective. By his 3rd year of ownership, you could take a putty knife and peel sections of rusted steel off the entire rear 1/3...2 years later the entire frame was like that. Their's was replaced early on before the recall, and was inspected and covered by Toyota. They were legitimately concerned that the frame was going to snap in half, it was complete junk. Cost them nothing, and they got a loaner.
I've never seen metal 'puff up' and just flake off like that before. It was terrible, but they kept them as customers by recognizing & correcting the issue. Took 2 days I think? They did a few extra things while the frame was off, but the actual frame replacement was completely free.