Do some observing also, see if he's trying to reach something on the other side of wire, or if feeders or waterers may be rubbing when he uses them. Keep us posted on how things go, see if it starts to look better, or gets worse. As long as he can eat and drink alright, he should be ok. He...
How old is the chick? How long have you had it? Pictures?
It may be a failure to thrive chick. They have unknown issues that may be from abnormalities that we can't see caused by incubation/development.
He may be resting/rubbing on that area while roosting, causing the feather loss. I've had birds were the exposed skin was very red just from the exposure to sunlight (seems less likely on his underside). I can't really tell where exactly the nodule looking skin is...so not sure about that...
If she's able to get herself around, eating and drinking, no one is attacking her, then yes, I would leave her with the flock. They are usually less stressed that way.