Bill wrote:
As I clearly said, the house is free of termites. I'm not talking about
"concealing" anything. Termites are endemic to this area and the holes
drilled in the basement floor & walls, garage slab etc for treatment are
plainly visible. My question concerns the best manner for repairing the
drywall damage.

It wasn't clear to me ) Free, as in professional inspection with no
bugs found? Good! How large an area, by the way? Probably should
remove the paint (all that is left) over the damaged area, spackle,
prime, paint.