There have been several threads about this and I couldn't believe it either but the consensus was that ARF does put a thin plating of rhodium on their fluted bezels. And yes there have been multiple reports of it flaking off. I'm sure it's some composite mix of metals that aren't the best quality, but the fact that it's flaking proves it's plated with something. SS doesn't flake off.
As far as fixing it, any jeweler should be able to replate it, it's not very expensive. White gold rings, etc are usually plated with rhodium. It's a common task.