[jmon]

I agree, maybe there was a leak at one time, either from the drain pipe or shut offs, hard to say. Looks dry now. I don't see any mold.

I would just keep an eye on it for now and watch for any new signs of a leak. Just use bigger baseboard molding for now and monitor your access panel once in awhile.

If you are up to it, and feel energetic about it, you can cut out the bad drywall and replace it.

 

[jmon]

You could just remove the bad drywall and replace/patch it with new. It does look like it got wet at some point, deteriorated and fell apart.