Cleaning/ polishing components

I am new to bike restoration and for my first project I am cleaning up an old rusty steel frame bike. I am removing the rust from some of the components by soaking them in rust remover and when wiping away the rust some of the shiny coating is peeling off like paint. I’m not sure if this is normal and the part needs to be polished in some way or if it is damaged beyond repair or if it is cheap material that is coated is some shiny metal or whatever the case is. Any insight into this specific problem or this topic in general are appreciated. Here is a photo of a headset spacer where the problem occurred as well as a quick release skewer.

 

What you see is chrome peeling off from steel.
It can happen even with good material that’s been damaged by rust.
So for a rust-damaged item, it’s normal.
Polishing can remove the last of the chrome to create a uniform surface, but won’t restore the original shine.
In financial terms, they’re beyond repair.
In practical terms, they’re still OK to use.
You could send them off to be re-chromed, but it’d cost a lot more than buying new parts.
The ”headset spacer” isn’t a spacer. It’s the top race of a threaded headset.

 

Thank you so much for your reply. Very useful information and even some bonus info about the headset.