I decided to go to a different LV the day after my awful experience with Krissy from Manhasset who, BTW, never did get back to me.
I went to the LVMH Tower in NYC and had an even worse experience.
I was informed to go to repair service on the 4th floor where the young lady soaked it with conditioner and told me where I could purchase the conditioner and then do it myself. This was her resolution! I told her the white stuff seems to be from a problem with the canvas and will reappear which it did in less than a minute, however, not as much in that moment. She said, she never encountered this problem before and stated it was from normal use and asked where I stored it because the weather (dry/humid) may have been a factor. I wasn't satisfied with her explanation and asked to speak to the manager. She brought me to the main floor to a manager, Margaux.L who could care less. She said she couldn't see anything. I showed her the totally on display which showed the same thing on the corners and she said that it's from moving it around to show customers. I asked to see a new one but she refused and stated that she didn't want me to go through them & couldn't care less about what I read on the Internet. She said, she would do nothing for me at this moment because the bag was in very good condition. She stated to come back within a year from when it was purchased if it worsens. I asked for something in writing because I don't want to be told in the future that I waited too long to bring it in but she refused. The young lady from repair service stated that she could send the bag to California where they can examine it.
On the way home, I decided to stop at another LV not expecting much but to my surprise the manager took the time to inspect the bag, noticed it, I showed her the same thing which was on a new one in the store, she took pics and got back to me within 3 days. I exchanged it for one that is free of this peeling flakiness mess.