Looks like it got a little warm.
What usually happens with these cheap things is they use cheap/marginal/under-rated electrolytic capacitors. They dry out due to ripple in the waveform which generates heat, which causes them to go high-ESR, which generates more heat, they bulge and then go BANG!
Or they cause other things to go bang as the voltages, (either within the regulator or at output), are no longer within the design spec - this regulator, (came with a USB hub), caused a AU$130 DVB-T tuner to burn out, (not mine).
In the image above, you can see the capacitor on the right has just started to bulge, note the top of the can has started to split along the fracture lines compared to the larger one on the left.
I found out the secret to electronics a long time ago, it's "Blue Smoke" that makes it all work. If there's a break and all the blue smoke escapes, the electronic item will cease to work....
We call it "Magic Smoke"
I'd be inclined to think the second yellow wire came loose and shorted to something (first yellow?) cooking that corner of the board. There doesn't really appear to be any thing else there it could have hit.
All that damage, (including the cutting of the yellow wire), was caused by a component that explosively destroyed itself. The circular shimmer on the left of the photo, (above the remaining yellow wire), is the end view of what's left of it.
Here's a better view of the bulging capacitor, (now on the left), and the ex-component on the right.You thought those cheap no-name USB/Phone charger were safe?
I might pull the electrolytics out later and test them with my ESR meter just to see what they read.Results:
Small capacitor: Ratings:
680uF 10V 105deg CESR:
Expected: ~0.2 ohms (worst case)
Reality: 47 ohms
10uF 400V 105deg CESR:
Expected: ~2.0 ohms (worst case)
Reality: 3.0 ohms