Definitely time to retire, that’s not just a nick in the tread, that’s a combination of worn through and separation from the carcass, either due to defect or an initial (probably smaller) tear or cut and then extra scuffing.
There’ seems to be a lot of wear and scuffing on adjacent knobbles too, like slight/mini skidding damage, is it like that all round the tyre or just at that spot?
Last time I had a tyre do anything like that it was a result of an emergency (almost) stop before plowing into the side of a van, locked up wheel + dry tarmac scrubbed and peeled a strip of the tread clean off the carcass.