Too many layers of paint on there now. The cracking will continue if you slab more paint over that, And what is going on with the left side of that trim?

I'd clean out the joint with a utility knife, prime and paint the crack, caulk with Big Stretch, then final coat of paint.

Very helpful--thank you!

The left side is more of the same. I'm wondering if the wood was never prepped properly for painting to begin with. I'm a little scared to dig into what's going on between the frame and the window (not sure I can make it worse!), but several of the window frames in the house look like this, and I don't want to keep throwing good paint after bad.

Well, this is kinda what happens when people start going down that slippery slope of painting and repainting over woodwork. How old is this house/woodwork. Hard to say what to do without experimenting - conceivably, if the prep work was not done well and theres a thick layer of shellac or varnish as the first layer, a heat gun could take all that grungy paint right down to the bottom in nice big swaths. You might find, as some lucky people do, that the wood is too nice to cover up again so maybe youd want to stain/finish. Or maybe not! Maybe youd paint over, but at least it would be a nice smooth surface without thick layer of paint blobbed on.

The house is 100 years old, but I'm guessing the wood was painted over more recently (last 10-15 years?), so you may be right that varnish is at the bottom.

Hopefully there is no lead paint under there. You may want to have that tested.

I agree, have it tested for lead, before you do too much with it. I would most certainly want all those blobs cleaned off, before painting. If you dont do that, it wont look any better after all your work, than it does now. It may be less work and look a lot nicer, if you just replace it.

It would probably be easier to just replace the casing trim. After you remove it, sand down the jamb and the area where the trim meets the wall to get it nice and smooth before repainting. If you don't replace the casing trim you will need to do a ton of sanding to get it to look right.

There are too many unknowns and variables to advise. Alll i can say is proceed carefuy OP or you may end up with exponentially worse situation. iF walls are old plaster and lath sometimes removing trim will loosen plaster and necessitate massive amount of plaster repair and/or replacement. It can be very expensive to custom mill trim to match your house unless you dont mind a slumlord appearance of mismatched woodwork (not advised). Windows - old wood double hung windows in good functioning condition dont necessarily devalue a house, and new windows dont necessaily increase the value - in fact often the opposite unless done in such a way as to preseve design integrity. I have beautiful gliding double hung windows I can lift with a single finger, would never trade those for some cheap crummy vinyl windows which jam, break and ae destined o the landfill in 20 ys..

However if the paint has globbed up entire sashes and channels to the point they are not functioning very well then yah you might want to look into replacement but could be sash only, would not hae to be the entire window. There are metal sash kits which then are inserted into the old window channels that the new sashes ride in.

One way to deal with the lead issue is to just assume that if your house has paint that was applied before lets say mid 1980s then assume it DOES have lead in it, and act accordingly. Sand only minimally - use a good nontoxic paint stripper (eg ready strip) and/or heat gun with temp controls https://www.thisoldhouse.com/home-safety/21014874/what-you-need-to-know-about-lead

Listen to PPF, PRO. Cut out old caulk with box knife (utility knife), clean up area well, prime, caulk, paint. To "tool" the caulk smooth with your finger, have a glass of water at hand, keep dipping your finger to keep it wet, the smooth out your bead of caulk. Let dry thoroughly. Paint after. To improve the overall look of the old paint jobs, you can use a putty knife/scraper to get rid of the more overt "blobs" and or visible drips. Same with chunky stuff in paint that previous painters didn't bother to strain out, or swipe off with a finger.

Don’t know if anyone mentioned a wire brush…that will save a lot of sanding by removing all of the old paint that is no longer adhering..apply pressure until the surface is fairly smooth before sanding…usually a wire brush will have a pointed end that can be turned to dig in close where two surfaces join…also,where the paint comes off completely…only a light sanding will be needed