Can a trim-pot wiper or contact point gets oxidized over time?
Oxidation happens with both heat and moisture. The heating likely comes from the diode itself. But really, it’s just age and time taking their toll on a vulnerable component (exposed wiper and all that.) For example, old audio gear will usually need its scratchy pots cleaned or replaced.

And, yes, you might be tweaking the diode bias current just a smidge and compensating for its age. Maybe more folks should know how to do that when their old CD and DVD players start to act up.

The pot itself modifies the photodiode feedback to set the laser diode bias. So the pot itself isn’t carrying a high laser current.

(Full disclosure: in a past life I designed these things. Not the pickups, but whole DVD and Video CD players.)

Anyway, good on you for keeping a piece of gear going like that and keeping it out of landfill, if only for a bit longer before the laser finally shuffles off its mortal coil. That’s a rare thing these days.