YES! Replace it immediately! DO NOT drive it until the coupler is replaced!
We're not kidding about this!
Also, do not use a Urethane coupler - they are junk. They stress crack and fail just like the one you have, only much sooner.
Try to find a genuine OEM VW part number 111415417 (fits years 53 - 72+).
https://www.bugcity.com/shop/s...ery=steering+coupler
Note: The older ones were round, the newer OEM version is square-ish. A new VW one should be around 20 bucks and could be from Brazil, Mexico or India and are good. A new old stock German version will be closer to 50 bucks.
I had an issue with an after-market (non-VW or German) version that had longer than stock metal bushings used which caused the horn to short to ground through the coupler. Replaced that with an OEM VW version and the problem vanished.
Your photo shows the adjuster on top of the box, and there is a YUGE! hex lock nut on the front (left in the photo, right on the front of the box). That gets loosened (it's a 41mm moose) and then you need a special tool that is nothing more than a 7/8" hex nut welded to a flat piece of metal. The nut gets cut to about half the height/thickness to fit up in there (it's a close fit to the body) and once the lock nut is loose you can use that tool to turn the adjuster (which is a depressed hex cup to accept the aforementioned nut).
I doubt that you need to adjust the steering box (although that seems to be popular on here, lately). Just get the coupler replaced and I'll bet you'll be good to go.
Good luck Robert.