How serious is plagiarism in a master’s thesis?
Edit based on subsequent info by the OP...

This has to be raised with the relevant department / committee / Dean so that it can be addressed in a manner they see fit.

They could demand changes, or they could leave all alone.

If you don't report this, then if the Master's thesis gets published first YOU will be accused of plagiarism...

So you have to report this, but how you do that is going to be a difficult choice.


you could see your advisor first and get the master's student to change those chapters.
If that is not successful, then you have to go further, as the possible consequences of leaving it could be serious for you.