Tip for next time: shine a bright light across the wall to cast shadows and really emphasize any imperfections. I do this while sanding, and circle with pencil anything that needs another coat of mud to fix then go back and take care of those.

I’m thinking paint but same idea

Joint compound can’t span cracks without just cracking again; it needs to be stabilized with something. Usually that’s the embedded tape, but it could also be fiber-reinforced compound or something like that too I suppose.

Take a rasp and putty knife and try to remove some material (not into the drywall, just take off paint and mud layers) so that you have a recessed area for the tape the go. This will prevent you from needing to build out the area so much to hide the repair, and is very necessary at the edge of the corner bead otherwise the metal edge that forms the corner won’t actually be the corner anymore (so there’ll be a weak and ugly “wave” in the line of the corner).

So the roof line meets the wall above this? My first suspect would be the step flashings along that wall (assuming a shingled roof). Often what seems like a small or minor detail in the way these flashings are done can mean they work great, or water gets in over time.

I don’t think wood shrinking/movement is to blame here at all. With single attachment at each joint and no bracing, there’s nothing stopping the whole thing from “racking” e.i. going from a rectangle to a parallelogram. You need diagonal bracing.