Looks like the extension jamb had a bad piece of wood or the laminate on top. You could try repair first and if that fails replace the whole side of the extension jamb.

That looks to me like bad adhesion of the paint. I can’t tell for sure from the photo, but it looks like there are multiple layers there, and more than I would expect in a new home. I wonder if there was a bad wooden surface, and it got patched, sanded, and then painted, and now it’s delaminating.

I would use a power sander to get to the bare wood, then prime and re-paint.