I could be wrong, but that looks like possibly a weld patch, and the yellow may be leaves, or it may be expandable foam. I've seen some sound-deadener on the inside of quarterpanels look like it made a seam, but this picture sure looks funny.
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Given how common lower rear quarter rust is on these cars, It would be unusual if the things had not been spliced. Same holds true for the rear window channel, they pretty much always rusted out under the vinyl top. Water gets into the trunk and in no time the trunk floor and lower quarters are toast. If the trunk floor on this one was spliced, some one did a really nice job from what I can see. The rear quarter from the inside looks like black sound suppression material is bubbled up just to the rear of you highlight line. Usually means rust or bondo underneath.
Dave
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