Corrosion in the threads like this is often crevice corrosion. This will be seen in all types of stainless but 303 offers poor corrosion resistance to anything worse than atmospheric conditions.

Why is the one fitting 303? Or why is it SS at all?
While 304 would be better than 303 it isn't by much.
Why not all Bronze?

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P.E. Metallurgy, consulting work welcomed

Yeh why not all Bronze?

Why not some polymer? Could be cheaper and longer lasting.

DHURJATI SEN

Thanks guys - I appreciate all the help.
The application is used for potable drinking water where it needs to be NSF-61/372 certified and we started out years back with 303SS since the Mueller-type brasses weren't very price-friendly at the time.
Casting CDA87500 could be considered since we have another product that is made with it but the lack of Pb seemed to cause flow / porosity issues at the foundry in the past.

We sell thousands of these units and it's only occasionally we see this problem which is why we thought it was site-specific.

Yes, it likely is site specific related to local water chemistry. But this combination is sensitive enough to this that I am surprised that it is only occasional.
There are ways around the brass casability issues that don't involve Pb, but they cost more.
There are other SS grades that would offer better corrosion resistance when you need them. 303 is a very poor excuse for a SS. Consider 2101 as an option for 'special services'.

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P.E. Metallurgy, consulting work welcomed

Looks like it’s been leaking. Do you use primer?

Thanks EdStainless, I'll have the guys look into the 2101.

stevenal - if you mean pipe dope, yes we use Loctite 567

Crevice corrosion explains the sporadic appearance of the problem as it is very much affected by the application of the thread sealant. If one installer doesn't coat the first couple of threads they will not be protected by the sealant and will become the initiation site for crevice corrosion.

To me, it looks mainly like a leak, with some associated corrosion. What would be leaking?

There is a primer for use with the 567. You spray it on the parts prior to applying the 567. Also take care to avoid putting torque on a joint after it has begun to set. Close nipples for example are a problem since there is no room for a wrench.

Loctite Primer
I've had much better luck since I began using it.

Thanks guys!

Crevice corrosion, good point. We build these in-house so will need to verify application of sealant.

Yes, we do use the primer on other threaded parts along with Loctite 272 but didn't consider using on pipe threads with the 567.

What's leaking? It's domestic plumbing so only potable water.

Potable water.. is this a filtration system that's producing water that's been deionized?