Good catch! After I read your post, it still took me several minutes to see the sulcata in that picture.I wouldn't remove ALL the substrate, just the hay.
It looks like you have a fluorescent tube and a spot light. I'm not sure but I think I also see a black Ceramic Heat Emitter. All of that is ok, far as I'm concerned.
I really don't know what has caused the hard outer layer of skin around the eye to come off, but it probably is pretty uncomfortable for him.
Oh no! I've just had a re-look at your pictures - In the last picture I see a really big no no! You have an adult Russian tortoise in with a baby sulcata. So many things wrong with this. And NOW I am almost positive I know what happened to your baby's eye. That Russian has bitten off the skin.
1. Never mix species
2. Never put an adult with a baby
Russian tortoises are gathered up by the hundreds and piled up on top of each other in large bins waiting for export. They are dirty. They sit in each others pee and poop and exchange all kinds of disease and microorganisms. You have put your baby in harms way. That Russian tortoise needs his own habitat. Now that I see the two tortoises, my advice is to get a whole new container and start from scratch with that baby sulcata, going by Tom's advice on how to set up the baby.
Hopefully the sulcata hasn't contracted any life threatening disease, and by putting him by himself, the skin will grow back around the eyes.