Is the bark on the sunny side of my young tree is cracked, sunken, and peeling off an emergency?
Not urgent. The cambium — the living layer just under the bark that builds new wood and moves food down to the roots — was killed in that patch, and the tree is now conducting around a dead strip. A narrow strip gets grown over in a few seasons and leaves a scar. A strip that wraps far enough around leaves the tree partly girdled, and the crown above it thins as the remaining live tissue gets overloaded. Either way the exposed wood becomes an open invitation to borers and canker fungi that would not touch intact bark.
What changes while you wait
This is not a falling-tree problem — a sun-scalded young tree is not going to hurt anyone. The clock is seasonal: the tree closes ground on the wound each summer, and every unprotected winter re-exposes it to the same conditions and typically widens the strip. Two or three consecutive winters without protection is what converts a survivable scar into a girdle. The thing that changes fastest while you wait is insect entry — flatheaded appletree borer and relatives find sun-scalded trunks reliably, and once they are working the dead margin they will chew into live tissue and finish the girdling faster than the cold would have.
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