Simkie, I’ve seen a ton of open areas done this way in the NE- was this originally something else before a ring, like a yard or standing lot?
I used to work a construction company out here - many of them would clear the land, feed the cleared trees through a chipper, and then use the wood chips as filler and/or a base layer. Two reasons: one, contractors love cheap/free material – two, when you cleared a formerly heavily wooded area, it tended to flood. If the very bottom of what you’re seeing is clay, that may be the original substrate of the area once the topsoil was removed. NE has a lot of silty/loamy clay.
Using chips as a base or even top layer in areas with lots of moisture has been used here for decades. I’ve seen it drain really well in standing lots, though sometimes if it really rains, you have some floating chips and/or movement. My horsey-BFF has been doing it this way for decades with no issues, and we get a ton of rain here. Every 5 years or so she would go in and scrape off the woodchips and replace them; even then still cheaper than buying base material like stone dust and pea stone for her areas. Her paddocks have always been gorgeous.
If it were me, I’d just fill/replace with woodchips, compact down, and top with sand as the rest of the area is. I would try to remove as little as possible in the interim as to not disturb the remaining semi-behaved substrate. I wouldn’t be scraping off the whole thing either, unless y’all want to give me $15k or so to do it.
So much of my farm is McGuyver’d, strung together by baling twine or duct tape, shortcutted, and hillbilly-engineered. We do what we can, with the things we can afford. 
I sympathize with your situation; scraping it all out wouldn’t be tenable for me either. Sometimes I wish I could sit every single owner of my property down in a room and ask them “WHY did you do that?!”. But then again, a hundred years from now I’m sure someone will ask that about me. 
I just replaced one of the rotted out sills in my ~200+ year old house. I won’t shock the sensibilities of COTH by informing y’all how I did it.