What is that chunky stuff it is growing in?

Your thyme looks as if it is lacking in light for starters a sit is rather etiolated. And what climate is it growing in? Humid?

Thyme should not need watering every 2 days. Is the root ball dry? Or damp? The symptoms of over watering are very similar to underwatering. So unless you actually feel the growing medium at some depth you won't know which problem it is.

Thanks for responding, Floral_uk. Yes, it's humid here especially now that it's wet season.

The thyme is growing in a mixture of soil and growing medium with rocks on top.

It's in our balcony and only gets around two hours of direct sunlight in the morning. Should I put it somewhere else where it could get more sunlight?

Yes - Thyme needs full sun if possible. It hails from Mediterranean hillsides so try to reproduce those conditions. Hot, sunny and sharp draining.