Not good by any measure. Some issues, some mentioned above;
1 The chopped strand mat area is very dry of resin and very clearly an air void in the laminate which should not have occurred in the original build.
2 Exactly how did this happen? If you are in a marina berth I would be asking focused questions to the boss of the premises. If on a swing berth not associated with a marina then tracing the source would be difficult.
3 Also whereabouts along the deck length is it? If it is around midships then the magnitude of the alternating stresses there due to the hull hogging and sagging in a seaway may be a future problem for a repair which is not done effectively. If it is close to the bow or stern then the alternating stresses will be less. Whilst a grp hull/deck joint/toe rail like this might not be a large influence on the structural integrity / bending stiffness of the hull overall, it will still experience alternating stresses due to its proximity out from the hull beam neutral axis in bending and if the fatigue resistance of the repaired area is not adequate then further damage will probably occur.
4 When you look from inside the hull and up to the damaged area - is the internal laminate still intact? I would assume / hope so.
5 Realise that the photos attached are very zoomed in but they look a tad nasty.
6 Hunter Yachts are now
www.marlow-hunter.com/ you could email them and ask their direct advice, and how such a dry laminate and air void could have occurred in the original build...........if they are any sort of customer service organisation they should respond promptly and fully.
7 If you are going to grind out the whole area and lay new polyester resin and glass cloth into the dry laminate and air void area I would make sure the whole cracked area was ground out so that no cracks were left which would continue to propagate in length into the future.
8 Would blend it out for sufficient length so as to allow overlapping laminates as each new one was placed on - as per Phil. The blend out ratio would suggest be at least 5:1 - this being the taper of the blend to the laminate thickness.
9 I would add biaxial glass laminate to the repair not just filler - whether epoxy or polyester. I would use epoxy resin and biaxial cloth, the resin poured in to fill the void and dry original laminate for whatever volume is needed - then the biaxial glass laminate added in successive layers to the original toerail cross sectional shape for the toerail length needed, and finish with 2 pack polyurethane. If done well this would hardly be noticeable as a repair.
10 Note that polyester gel coat won't stick to epoxy long term or even short term.