What should you do? Well, that depends. Are you going to keep it, or trade it in? Put your carpet over it, and trade it in?
Sell it the way it is?
Or lift the vinyl up, then the OSB that is likely rotten over twice what you think it it. Replace it back to solid floor joists that have no rot, then cut the vinyl back to a logical spot and put in a patch of flooring boards with nice trim on the sides to cover the edges.
Or do the entire job with new plywood as much as you can, and replace all the flooring.
So..what will you do?