EVERY single welding workshop has a lead like this. Go and look.
Blackened and horrible. But it still works so why fix it?
Volt drop, that's why. The damage on the contact points are creating a high resistance and dropping your voltage at the weld.
Welding is a Low-Voltage exercise anyway so dropping a couple of volts will affect your weld quality.
Usually not a big deal with MMA (stick) but fluctuating voltages will cause issues with your Mig welding especially. Ever had you welder not weld the same even though the settings and material are the same?
The effort spent cleaning the work piece is wasted if the clamp is this dirty.
In this case also the lug connection on the clamp end is slightly loose and corroding as is the cable.
The Dinse plug on the end is very worn and will also result in the voltage drop mentioned earlier.
This is now 3 points on one lead that have a drop. It ads up and can affect your finished weld. Its also likely that the torch end has enough problems to overcome without the earth adding to them.
In short, keep your connections tight and your contacts clean.