Well I found out what the answer was......Talk about a perfect storm....
I was using JQuery 1.9.1. Apparently the recent versions of JQuery cause "bundling" to break.....
In debug mode, and even in release mode on IIS Express bundling was't doing anything. However, when I published release-mode to IIS it suddenly sprung into life.....and promptly broke my javascript.
....Which was preventing my JQuery.on handler from overriding the form submit button.....
....Which was causing the form to be submitted via HTML and not AJAX......
....Which was causing the JSON response to be "downloaded as a file" by the browser......
....Which makes me feel a bit dumb for asking the question in the first place as all the clues were there.....
The solution, of course, is to fix the jquery*.min.js files so that they don't break bundling (as described in the attached question/answer). Ho hum.