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That is the caliper piston dust boot.
It may not be responsible for a soft pedal but i would fix it straight away.
Over time, dirt & grit will get on to your piston and destroy the seal and maybe the piston as well.
Doesn't look like a fluid leak.
Keep looking at other wheels.
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Phil
84 ROW Carrera (guards red), A/C delete, 993 Bischoff HE's M&K 2/1 heat backdate, Fuchs 7 + 8 x 16, Koni Adj. F+R, sway bars 20F 22R. turbo tie rods, Strut brace, brake cooling kit, C/F Recaro GT3 copies. 911Chips custom DME
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