Eventually it will as the rust eats away the steel. You should find some rust neutralizing chemical. Use it then paint it to seal it.
If that was mine, I would tear down the machine and replace what is rusted with new steel tubing. Would not be difficult for me as I am a welder/fabricator
OK, still not an integrity issue. It is hard to tell but from the pic does not look like a crack which would continue to spread under stress. You caught it in time, just keep an eye on it going forward after you paint it.
I see more than one crack in that frame and one that has opened up... So if this side is cracked then the other side is. Usually if paint is cracking and falling off like that their is a underlying issue ohter than rust, like cracking in the frame or something bent enough to pop the paint.