Matt James Hangs Out with Rachael Kirkconnell Amid Reunion Rumors

Matt James might've walked away from Rachael Kirkconnell on national TV after the racism dust-up ... but he seems to have circled back with her in the real world for another go.

The former 'Bachelor' was seen hanging out with his ex Saturday in the City of Angels -- grabbing brew at a bar called JuneShine in Santa Monica, with some friends in tow. Matt was trying to be all incognito for the outing, but it's pretty obvious to us that's him and her.

His bottom-half attire pretty much gives it away ... so does the skateboard. The guy's often seen shredding and wearing short-shorts ... especially those green/blue ones. He even seems to have ran a marathon in NYC with them back in 2019, as you see here.

As for Rachael ... well, she's all about that sunglasses-resting-on-the-head look, and this gal who's with Matt in these photos sure bears a striking resemblance to RK from the side. Pair that with rumors they've reunited in recent weeks ... and there ya go.

There didn't appear to be any PDA between the two for Saturday's get-together ... but they were definitely leaving together. We got a shot of them walking away from the bar, and it's clear they were heading in the same direction, and possibly to the same next destination.

So ... what does this all mean??? Seems Matt has forgiven Rachael and/or gotten over the controversy ... maybe both. If that's the case, it certainly appears to be a full 180 from how he said he felt when he broke it off with her during the 'After the Final Rose' ceremony, when he explained why they couldn't be together.

It all goes back to social media posts and old photos of Rachael -- which many considered racist. She posed for pics with sorority sisters of hers at an antebellum-themed party -- which has racist roots in the South -- and liked racially insensitive pics on IG that featured the Confederate flag and white girls dressed in ponchos and sombreros.

There's also a claim that Rachael used to make fun of a white classmate for dating a Black guy back in high school. She copped to some, but not all, of the resurfaced behavior ... and apologized numerous times, while also telling people they shouldn't defend her actions.

We reached out to Matt's rep ... so far, no word back.