Never heard of this. Only things I can think of.
1: Is it REALLY 100% cotton, because that doesn't melt. Tell me about it that was the first thing that came to mind!
2: If it's all cotton, what isn't? The tags and website state that their gi are 100% cotton Did they use some kind of plastic or rubber fill for the collar? It's not the collar it's the bottom of the jacket. In BJJ, the collars are seldom rolled cotton because it's heavy and takes forever to dry. So, they fill them with something else... usually a foam material.
3: If it's not that, is the thread something weird? I'm guessing the fabric is a cotton/poly blend use to cut cost, I bet they never thought in a thousand years this would happen. When I called them they were not happy I sent them pictures right away and they said they would get back to me. I have a feeling I'm stuck with this gi which I just bought.
4: And if that's not it, what else was in the wash? I always wash my gi by themselves to prevent bleeding and such.