It looks like the thread in the seam that holds the poly cord has rotted. It also looks like the actual awning fabric is either rotted, severely abraded or otherwise damaged.
While it may be possible to repair the awning fabric by removing it, resewing the stitching and reinstalling the awning fabric. If you're going to go to that much effort, you might as well simply replace the awning fabric. You can find replacement fabric for 16' awnings for around $100-150 on EBay and Amazon. OEM fabric is usually about two times that cost and custom constructed awning fabric at a local upholstery/marine company would probably be cost prohibitive.
Here's one such offering on EBay: https://www.ebay.com/itm/62216-RV-Aw...0AAMXQuCdTe7~4