What's going on here?

[Bill Edwards]

It happens the most on butt joints where there's a gap, I first found it welding box section together with small gaps or butted up to a rounded edge. Fresh steel, 2.5-3mm thick.
AC high voltage for all the work.
Like you say, it seems as though it sucks/sags into a gap.

 

[Arclikeharrypotter]

I'll try recreate and you will see what I mean, you can see from the reverse side of the plate where the weld has sucked the parent material back and into the weld.