FIRST POST Loose Spark Plug

I've got a '78 KZ200 that is still kind of new to me. I'm still learning a lot about the bike. I've noticed an issue with the spark plug vibrating loose. It's not backing itself out. I can't turn it out with your fingers and still need a wrench or ratchet. But even after torquing it down it still wobbles around. It's reached the point where I can hear air getting sucked in around the spark plug when I crank the engine with the kickstart. I pulled the plug and used a scope camera and noticed some chipping in the threads. What would've caused this?

 

The bike still runs, I've been riding it around, but this issue concerns me and I don't want to do any more damage. I know cars but I'm new to motorcycles. What are my options from here? How do I diagnose? The one thing I haven't tried yet is replacing the plug with a brand new one. Beyond that, what do I do if it's the threads in the head and not the plug itself?

Thanks y'all! 

Welcome from the UK