It's the ozone produced by the hi voltage. When the spark jumps from the rotor to cap, ozone is produced, it's a corrosive gas and a product of the physics and chemistry going on in there.
Venting the cap better and checking phasing may help but I think the main issue was the coating, (if any), MSD applied to the iron parts in there. Seems it's less of an issue these days so perhaps processes may have changed.
It never caused any misfire or timing issues with my stuff, I just used to strip and clean them every season, a while ago I clear coated one of the dizzy's Fe parts (with a brush). Seems to have held up OK

My car almost never sees rain and never snow and the reluctor would rust, we do have lots of humidity in KY though. I never had any issues caused by the corroded reluctor, but I pulled and cleaned it once a year.

I think Tig well covered the reason for the corrosion.

Bilet polished aluminum. No markings. Uses plug style terminals. Mopar style cap retention. Cap and rotor terminals are brass. Sorry this is the best pic I have. I welded up the advance mecanisum. Also bought an extra cap and rotor in 2012 when it was purchased. Swapped in the new cap and rotor in 2018. The original was perfect. But figured I had a new one. Kept the old one for a spare. There has never been any corosion. Car has never misfired, ever.
Doug

Thanks Doug! That's what I have! Mine doesn't have any weights or guts in it so I think it was probably set up for a crank trigger....I only paid 10.00 for it a couple of years ago...

While they appear to look like the old Mallory produced Mopar distributer they are nothing more than a Chinese copy - the advance assembly will eventually break the plastic bushings and grind against the case - check the advance adjustment screws - if they start to come loose it will self destruct - supposedly they improved on it - but no way to tell which one you have - I will never trust one - for the price difference the MSD is the way to go!

I think first question should be what kind of box are you going to trigger with the distributor? And what type of signal is that box built to read? The MSD distributor is about as reliable as any I have used over the years. The MSD, stock mopar and majority of performance distributors use a magnetic pickup that generates a A/C voltage signal. That voltage increases as the RPM increases, the ignition box will trigger anytime it sees voltage over a certain threshold. Usually you will only have a problem if the pickup is generating a dirty signal, with stray voltage spikes. If you are using a distributor and ignition system on an aftermarket electronic injection system, best to ask the company what kind of signal the ECM likes, some are picky. I once used a Chinese MSD copy distributor, which actually made a higher voltage on the distributor machine than an MSD distributor, but the FiTech ECM did not like the excessive signal for example.

The other two types of sensors used by the OEM are Hall effect and optical sensors. Optical sensors are the most accurate but most expensive rpm signal you can get to my knowledge. Hall effect sensors generate a digital on off signal also very accurate.

any luck with a pertronix conversion ?
i have done two for my one buddy, one a small block, the other a big block.
they seem to be working good all these years later, but he just putts around. no performance/foot to the floor use.
i have no problem modifying a factory distributor, but i did fabricate a pair of pliers to remove that pesky clip below the rotor.