Your fourth picture makes me think the bracket is bent. Should be “squared up”. A straight line across the top and then 90deg angle going down. I agree that the vertical rods should be bent back outwards (towards the front of the bike) - 90deg angles. The center portion looks spread too wide. I’m also wondering about those two bolts at the ends of the black webbing sleeves. Why are they there and could they be used to install a metal or plastic plate in the bottom of the bag to keep its shape?

Now for mad scientist stuff. Try a test piece of corduroy nylon first but how about turn the bag inside out, scrub all the flaking off and recoat with a water based polyurethane? I’ve used water based polyurethane (Minwax)on fabric before and had no complaints. No idea about long term durability though.