Hmm - That doesn't look too good
If it were me (and it ain't), and I REALLY wanted that frame, I might strip it, soak a day or 3 in oxalic to remove the rest of the rust, and then braze a little patch over that, IF the stay proved not to be too weakened by internal rust.
I'm sure others might have a different opinion, as in - Fuggedaboutit , and move on .............
OTOH - Now that I look closer - Are you sure it was rust?
It looks like there might have been a severe tire rubbing issue there - Enough to wear though the stay ?