Window in shower enclosure: What to do about it, if anything?
If it's an old house, it may have originally been a claw-foot tub with a full surround curtain. And the window was the ventilation.

If you want to keep the window (as it sounds like you don't want to seal it off), one option would be to replace it with a vinyl window with vinyl trim. Make sure the vinyl trim is glued and sealed. That would get rid of the 'wood in the shower' issue.