There are a couple things you might attempt, but it will in no way allow you to regain the original strength or integrity of the side wall. Since it’s located under a window, you do have some hope however. It will necessitate the removal of the window, (visit this page for information about removing and reinstalling a window). Once the window is out, peel away all the rotted paneling, insulation and structural members that have been destroyed. Once you reach “good wood” or non-damaged adjacent sections, trim and square the inside paneling. What you should now have is a big rectangular gap inside the RV where the damage used to be. You should be able to see the inside portion of the external bubble on the outside of the coach.
Next it will be necessary to secure and cement blocking wood directly over that bubble from the inside and make sure it covers beyond the bubble on all sides and connects to the first structural members of the “good wood” you originally exposed. Apply the appropriate type of glue and clamp the block in place through the window to flatten the exterior bubble against it. This will require some large C-clamps. Place a thin piece of protective plywood temporarily on the outside wall between the clamps and the side wall. Once that cement has adhered, it should have eliminated most, if not all of the bubble. It may not be possible to eliminate all of it. You may want to add additional blocking inside the wall void where the mounting screws for the shades will be located and blocking to attach a new section of interior paneling.
Once the clamps and temporary blocking are removed, all that’s left is to add insulation and a piece of interior paneling that matches. Trim the new paneling piece to match the cutout you made when removing the damaged, soft wood. You can add flat trim strips to cover the joints between new and old paneling.
You won’t gain much structural integrity, but it may eliminate most of that exterior delamination bubble and provide solid mounting support for the shades. This is the only thing I can think of, short of replacing the entire wall. Be advised, however, that once degradation begins, it’s likely to spread and further delamination may become evident. Hopefully the previous owners stopped the leak and the water intrusion was minimal. Good luck!