Besides being dirty, those wires appear okay. The wires feed ignition power to whatever appliances they are connected. The insulation withdrawing from the terminal and slipping up the wires is more cosmetic than dangerous. If you don't like the way it looks, cut the wires back then strip, crimp and solder a new terminal onto the bare ends of the wires. A Packard 56 terminal imaged below should be correct for that application and readily available.