The material was scrapped because someone touched it with their bare hands.
There are quite a few parts i've scrapped thanks to people touching them, then walking off for half an hour. You end up with rusty fingerprints on the surface.
FWIW, the last magnesium i worked with (a prototype front subframe) walked its corrosion test, until we re-ran the test with damage to the coating, we screwed one bolt out of ~24 into it, this damaged the coating. It failed less than 5% of the way thro the test (the bolt dropped out).