Probably best to just leave it alone. The cracks in the knot are no problem, but it's probably some flexing at the knot (maybe caused by the weakness on the back where the knot comes through that has allowed it to chrysal. It's probably stabilised by now...
I hate chrysals as much as the next man but that's a difficult place to do any fix.
Answering your other question. The knot looks sound on the belly... BUT... you can't tell how far in they go from the back and if there is any rot there. Personally I'd probably have dug it out from the back to see how deep and if there was a cavity or pocket of rot... You can always put in a decorative plug for the back afterwards, but it will add zero strength.
However filling any cavity that is deep past the center into the belly (the compression side) could have maybe helped prevent the chrysal.
The only way to strengthen the back is to put an overlay about 1/8 - 3/16" over the knot area having taken out a loooong shallow flat curved scoop. I wouldn't do it generally as it looses the character, leaving a little extra width normally suffices.
A total permanent repair would be to rasp out the chrysal and patch it. Dig out and fill the knot then patch an overlay on the back....
Or just leave it alone like I said at trick one
Easing everything else off just a tad should help stop it getting worse.
Del
PS. Chrysal don't happen where it's too strong/stiff
They happen where it is bending too much for the strength of the wood.
If you remove wood from that area it will certainly get worse (or snap)