Looks like what happened is that the finish initially got nicked on the side of the limb. Over time, water gets in and swells the wood, which in turn breaks the glue bond and pretty soon the limb starts coming apart. After drying thoroughly, you could try drizzling some epoxy into the area. That may hold it together. Or it may not. Can't tell how bad the damage is from the pix. However, if the bow lost that much weight, the limb is probably on the verge of snapping. I vote to retire it as well. To keep that from happening in the future, give your bow limbs a good coat of wax a couple times a year. And if you chip the finish to bare wood, touch it up with varnish.