Looks like stretch damage to me - embroidery can weaken a fabric, particularly a stretchy one like the large plush have, since it makes a lot of little holes and then you end up with strips of non-flexible area mixed in. If Wysteria was played with roughly, like one kid pulling on either side, it might cause that kind of damage. Iron-on reinforcement is probably the best way to go, since it'll show the least on the outside. I'd maybe see about bringing the fabric sides back together with some fine stitching first, just to help keep things in place before patching as well.