Not rust, but looks like ebed'd copper flakes.

As for upper, receiver M-4 feed ramps are too wide for M-4 type barrel extension (take looks like where done after the fact, and not part of original barrel extension milling), the top of the chamber straight wall back entry chamfer looks to be a pitted mess where the chamber chrome plating is (read problem in milling, before bore and chamber were chrome lined.
Also, barrel extension should be slightly proud of barrel extension socket in receiver, since carrier is going to crash to it at lock up, but the face that the barrel extension is already carrier dinged to the right side, screaming that barrel extension was not correctly heat treated and tempered correctly (being too soft instead).

Myself, upper would be going back for refund, and another one bought from a better vendor isntead.

And keep in mind, that the reason that the M4 has extended feed ramps, is to allow it to shoot Mk 262 ammo, where the bullet has a longer ogive, and the mag may not get the front of the case up fast enough for a clean feed.



Hence look at the front side of a mag, and notice the inner bend sections, that kicks the front of the case up during strip, that will allow standard bullet shapes like the 55 and 62 grain bullets to place the front of the bullet in standard feed ramps.
With the longer ogive of the 69gr bullet types, do not get the front of the case up faster enough, and why the extended feed ramps on the M-4 rig, to prevent bullet tip from tagging bottom of standard barrel extension on the feed.

Then we get into 1-7 twist barrels for the Mk262 type ammo's, which pretty much sucks to get M193 and M855 ammo to print tight tight instead.  Hell, 1-8 twist can get M855 to group well, but still has larger patterns with M193 ammo.

So to sum it up, if all the rig is going to see is 55gr/62gr ammo, don't need the extended feed ramps on either the barrel extension, nor the upper receiver, and it regards for barrel twist, 1-9 twist all day long.

Barrel is produced, including chamber and rear chamfer area, then barrel bore and chamber chromed line, with the fade out just being how well the rear barrel thread on plug seals off to the barrel for that process.  


Once bore and chamber are chrome lined, barrel extension and FSB are installed, with barrel ends and gas port plugged, so rest can be parkerized.

So for muzzle end, should look something like this,



And chamber side, prefer that the chrome lining extend past the taper entry section, with it fading out about the flat back areas of the barrel instead.