Holy smoke, you can't do that!!!
No! The problem is the panel cover needs to be at a certain height from the breakers to prevent this from happening every time you flip a breaker to "off".
Whoever did that with the cover needs to stop doing electrical.
All the drywall needs to be cut back, so that the panel deadfront can bolt up flush as intended.
There's also a huge working-space issue here.
Every panel needs a working space of
- 30" width (does not need to be centered on the panel)
- 6'6" (78") height floor to ceiling; can be up a step
- 36" depth
This area must be kept clear AT ALL TIMES. No stacking stuff there.
So you will need to demo some of that brick wall, or, whatever is to the left. Push out that inset space so the inside dimensions of that space are 30" wide x 78" tall. And then do whatever finishing you need to do for building-code reasons.
It's a CH panel. Best in the world.
You certainly shouldn't downgrade to a lesser panel. So if you do want to upgrade, say for panel spaces, change to another CH.
As far as GFCI/AFCI, CH is fully supported and all that stuff is available.