That look like a bad bondo job in that pic but hard to tell, if it is the panel needs to be stripped until you hit clean/ straight metal then new body work before the paint can be blended. White is great at hiding dings but a pita to blend.
Looks like a hacked repair that rusted or was rusted and hack repaired. What's the back side of that look like.
Ok that last pick show'd up while I was typing, you prolly need to pull the tail light to get a better look, that lip on the hatch looks crusty too.
Is it impact damage or rusty, I bet there is more poor body work and hidden stuff.
Oh man, I know all about poor body work hiding things like rust... if it's that bad where the bondo broke away, it's likely worse than you think. I'd start by pulling the interior panels behind there and see if you can find any damage to the inner structure. The right way to fix that will be to cut out that quarter and get a new one, or do what I'm doing and find a good donor shell and body guy that can and will do it for you.
Hard to say just how bad it is until you expose everything. Replacing the quarter is a lot of work, so I'd generally only do it if you deem that quarter to be unsalvageable.
The good news is that unlike a lot of newer cars, there is quite a bit of access to that area of the car from the inside. Take off the tail light and remove the interior plastic from the inner quarter, then take a look. If it's dented, then you have to decide if your skill level is going to allow you to pull that quarter back out enough to skim it with some filler and repaint, or if it is too far gone.
Rust is an issue, but you should have a better view of that once you have stripped the panel.