Well, that looks like a bit of both. Poor baby. Thank you for the photos. There's little you can do but to treat it with a tiny dab of antibiotic ointment (without pain relief), keep it separated from other chicks so they won't peck at it, and hope for the best. If all goes well, the navel will close on its own - but the chick is likely to be weaker and smaller than other chicks. To be honest, you will likely find it dead within a week or two.
Please don't blame yourself. It's the nature of keeping chickens and hatching eggs; often they die from deformities like this or with no explanation at all. It happens to all of us and why people talk about "hatch rates" and "survival rates" and "failure to thrive" in regard to hatching chicks. Even under the conditions of perfect genetics, perfect eggs, perfect incubator conditions, and perfect brooder conditions, it still happens.
Fingers crossed for your baby.