How to repair lining paper gap ahead of painting?

[curium]

Hi

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This is the window reveal in a bedroom in our house - we moved in 6 weeks ago. The paper was lifting up so I've removed it back to a sound fixing.

The surface underneath doesn't look like plaster. I'm judging based on previously plastered walls I've had in a previous house, perhaps it is a type of plaster...

It seems sound enough. Not chalky, smooth to touch.

My questions are:

1. Why would they use lining paper instead of sealing and painting directly onto this surface which looks smooth enough?
2. Should I remove the rest of the lining paper in the room before painting or should I just make good this window reveal and paint?
3. How best to make good the window reveal; splice in some replacement lining paper? Sand down the edges and paint on top? Make up the difference with filler?

I'm a bit confused with how best to proceed as I've never dealt with lining paper before. I'm wondering if the lining paper is hiding an issue - it's an external wall, perhaps there's evidence of damp?

Perhaps I should steam off the paper completely before deciding how best to proceed? I had intended to just fill all the holes where the previous owners had removed fixings and then paint but the lining paper has stumped me.

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Good advice appreciated?

 

[Tigercubrider]

I am no expert but I'd cut a vertical line gently into the good lining paper and remove it.
Then fill any holes
Then apply more lining paper in the reveal, possibly tearing the edge so that where it overlaps the original, it doesn't make a straight seam. Sort of feathering.
Then paint it and see how it goes.
Where the (curtain track?) was I'd use easifill in stages and sand it to match.

 

[Chivas69]

Most likely lined because of cracks, bumps in original plaster. I personally would sand the edges off the lining paper then polly filler the gap using a large scraper. Once dry you can sand it all smooth so it matches the same level as the lining paper.
Alternatively you could patch in some new lining paper and fill any gaps.