Honestly, that looks completely different than I expected. I really don't have experience dealing with a wound that is affected to this extent in rabbits, but I do in horses. And I know that in horses when the granulation tissue starts to overgrow past where it would be even with the normal skin layer like your rabbits has, steps need to be taken to fix any overgrowth of tissue, before the layer of skin can start to grow over it and the wound completely heal. In horses, a steroid cream can help prevent the overgrowth of granulation tissue. But before that, any overgrown tissue needs to be cut back to be even with the skin layer. You can google 'granulation tissue and proud flesh in horses' and that will give you a better idea of what is going on with your rabbits wound and how it is treated when it occurs with horses.
From your description it sounds like your rabbit is doing just fine, and the wound has actually filled in and is healing and may not even have any infection present anymore, but is just 'overhealing' with granulation tissue which needs to be stopped. I see no reason that your rabbit would need to be pts or even need an amputation, if the wound is dealt with properly by your vet. Your vet just needs to get a handle on the overgrowth of granulation tissue is all, and that may be easily accomplished with trimming away the overgrown tissue while your bun is sedated, and keeping a steroid cream on it to keep it from overgrowing again. Though your vet will need to make sure that using a steroid cream is the right treatment to use on a rabbit with this issue.
It may help for you to have your vet consult with a rabbit specialist in order to get the best info on how to proceed next with this type of wound problem. I don't know if you have any really good specialists in Canada or not. I don't even really know who are specialists here in the US. But I do know that the UK has some excellent rabbit specialists. Frances Harcourt Brown, Molly Varga, Iain Cope, John Chitty, Mark Rowland, just to name a few. If you can get a consult with FHB, she is one of the best rabbit specialists there are. But she is semi retired so you would need to find out if she is available for consult or not. It will cost you a consult fee, but if it means this doesn't keep dragging out and you get the needed info to get this wound healed, it will probably be worth it. You will need to have your vet contact the specialist though.
http://www.crablanevets.co.uk/