What in the world is that? In all my years I have never seen anything like that before. People pay big bucks for a crackle finish, you may have started something new.
As I see it you have three options.....
1) use a broad knife 6" or so and just scrape the surface and take off what is willing to come off, and replace the casing moldings.
2) scrape off what you can, sand what you can to prep it for a skim coat using drywall mud, then prepare yourself for a ton of sanding.
3) gut the room of all wall material and install new drywall and trim moldings.
INSTALL A GOOD HIGH VOLUME EXHAUST FAN
What material is on the walls that caused that to happen? You’ve got a big project ahead of you.
Good Luck with the project,