Per the OP:
- snip -
The sender is sending from Coinbase
- snip -
Thanks Danny, Need to get my eyes checked!

It would appear that following
their announcement of implementing SegWit, Coinbase have indeed started using bech32 addresses for change... There doesn't seem to be any official announcement on this, the only reference I could locate was a very confusing and poorly structured blog post:
If you look at Coinbase segwit transactions you will notice the change is already using bech32, and sends are already supported for bech32.
Looks like the
Bech32 Adoption page needs to be updated

We aren't segwit enable, but my goodess...all the sellers are in a tizzy since their Ads aren't funded instantly @_@
Thank you everyone for input and answers.