Has anyone ever seen this happen before?

I bought the car about 3 years ago with the exhaust and a bunch of other Alta stuff already installed. So, I really don't know how old it is. The chrome is also peeling off of the exhaust tips pretty bad. The car has been a garage queen most of its life as it only has 29k miles for a 2003 Cooper S. It has never seen snow and rarely sees rain.
My question is how would I fix this? can this be patched or should I see if I can get a new rear section from Alta and have it welded on?
I really don't have $800 to spend on a new exhaust.
Thanks for any help in advance!

looks like where the hanger was. Yes a shop can fix that easily and cheap.

looks like a notch effect around the weld combined with vibrations/all the other forces tearing at it, widening the crack until the hangar breaks off.
seen that a few times before ( on different exhausts )

and as mentioned before, a exhaust shop should be able to fix that

Awesome! that is really good to hear!
Thanks alot!

Definitely find a shop in your hometown that does exhaust repairs or installs. I've had my resonator repaired for about $80 from a local shop where I live. Same with my girlfriends car, her's had a resonator leak, so they installed a new one for the same price as above.

Seems straightforward enough. They could either patch it, or weld in a new section of pipe, I suppose. Good luck, and let us know how you made out with it.