Is it dry or is it seeping fluid? And does it hurt or do you not feel it? How are your feet in general? Any neuropathy?
Generally your foot looks well circulated. That is a good thing, although I would need to see it to be completely sure. It means that with the proper care it can recover well! It happens to us every now and then because our wounds take longer time to heal, we can get necrosis and our wounds can worsen before they get better. On wounds like these, I would say that small amounts of friction causes cells to take damage. Normally, we would recover in moments, before they even turn into wounds, but because of the diabetes it takes a longer time to recover. Thus, friction can much more easily cause wounds like these on our feet. From what I remember from my books on wound care (this is quite a few years ago). Are your shoes well fit? Usually on the medial side of the big toe, sores usually develop because of shoe wear that's not fitting too well.
A good test to see if the foot is well circulated is:
Press the tip of your toe and see how long it takes before it goes from whiteish to redish again. Should take about 2 seconds for it to refill, if not, peripheral circulation can be a bit reduced. But there are ways to treat that!
Hope it helps.