Rust conversion/"reformation" is a common chemical process that does exactly what it says - it turns iron oxide into a more stable composition to protect the underlying steel. Cosmetic oxidation is also a known and normal engineering thing - it's EVERYWHERE in architectural cladding, planter boxes, etc.
I understand Peloton's being pummeled in the press recently for the old (and new) CEO, and this is a continuing hit piece, but I can only imagine the furor if Peloton had decided to scrap/trash all those frames instead of applying a completely normal and minor metal finishing touchup.
Tip for anyone who's disturbed by rust: don't look too closely anywhere under your car, or within your appliances. You might witness some cosmetic oxidation! The horror!