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Delamination is characterized by bulging and waviness of panels, indicating a separation of layers within a composite material or structure. This condition often arises from the failure of adhesion between layers, which can result from factors such as moisture infiltration, thermal expansion, or mechanical stress. The bulging and waviness are visual indicators that the structural integrity of the material has been compromised, leading to potential weakness and further degradation if not addressed.

In contrast, the other characteristics presented in the options do not specifically indicate delamination. A deep dent in the surface suggests impact damage rather than layer separation. Visible weld cracks pertain to issues in welded joints and indicate structural failure at specific points, not layer separation. Lastly, uneven surface rust is indicative of corrosion and does not relate to the delamination process, which concerns the integrity of layered materials.