I had an area of bathroom tile that had fallen lower than the rest of the floor. When I started to explore under the 67 year old tile, I found a masonry "sub floor" that is crumbling. Under the masonry is a wood sub floor. My question-- Should I remove all the old crumbling masonry and rebuild a sub floor to support my new tile floor? (The old floor has settled quite a bit- at least an inch in the corner.)
You need to get rid of everything under the tile. The bed at one time was probably really firm but as it gets water it will start to break down and those sand bases really don't dry out well once they get wet.
If you need to add height just add plywood but top layer should be cement board.
If you don't want to dig out all that concrete (or whatever it is), I'd consider putting in 3/4 plywood over it, then staple on wire mesh, and put the thinset on this and the tile. It will float the tile over the subfloor. I've seen this done several times successfully. If you want ot go high tech, get the Schsulter system plastic underlayment and use that instead. I've see that laid on to of sculped styrofoam in a contoured shower pan. I'd maybe put floor leveler concrete on your broken concrete to lock it all it before the Schuler, but not the 3/4 plywood.
Not sure why it broke like that - is it an unstable area, or was the concrete mix just poorly done?