As long as it is not leaking oil from the three possible leak points (red stars) there is nothing to fix.
The rubber coating missing from the outer edge of the seal steel shell (green mark) has no effect at all on the seals serviceability. At some point grit, string, something was likely packed up behind the sprocket and it wiped the rubber off the steel shell.
As you live in a location that seems to turn bikes in to corroded rust buckets, I suppose protecting the steel shell from rusting might be worth a few minutes of time ...but getting paint to stick will be tough.... Id likely clean with brake clean, acetone, or the like on a rag...dont soak, just wipe it down.. then put a VERY thin layer of RTV over the exposed steel. DO not gob it on...just enough to coat.
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