Yes, it is a fatigue failure, but maybe not only because it was adjacent to a weld.
What I would look for first would be for the upper piece of the hanger to show evidence of running out of rearward travel for the piping to thermally expand into. That would put excessive bending right at the toe of the weld, where you have a significant structural discontinuity (stress intensifier).
The amount of thermal expansion is not something to ignore, as 8 or 9 feet of stainless steel could expand as much as half an inch, possibly more, from a 70°F ambient as installed to a few hundred degrees hotter at full-hot operating temperature under 'race conditions'.
Not much different from designing/analyzing high temperature steam piping systems, actually.
For a repair, I'd definitely reinforce what's there, and make sure that plenty of rearward travel was made available where the hanger is hung from the body. Might need to be careful about how the reinforcement was added, because you might remove too much of the hanger's own flexibility in the process. Can't see the upper details, so I can't make a more definite call here.
Done. Attached is the picture of the weld. It looks and feels solid. However, if anyone has the same issue later, just make sure they weld it at exactly the same angle. He welded it maybe one degree different and now it doesn't sit exactly in the center of the opening (in the bumper) anymore. I'll probably take it off and try to bend it back to the original angle, but will probably break it in the process and be back to where I started. For now, I'll leave it as is and direct my attention elsewhere.