Ready–mixed joint compound or mud, can be used to repair damaged drywall tape in most cases. However, if the damage is due to water leaks, it's better to use setting compound.
Paper drywall tape will sometimes start to come off the wall or ceiling for no apparent reason and sometimes the paper will develop air bubbles and bulge along drywall seams. When this happens it's usually due to too much mud left between the tape and wallboard when the drywall finishing was done.
Paper drywall tape may also bubble if it gets wet from a roof or plumbing leaks. Even a minor leak can cause the paper to soften and come away from the seams.
Cut away all the loose and damaged paper and scrape off any loose joint compound. If you're dealing with air bubbles, use a sharp drywall knife to cut the bulging paper away. Cut cleanly around the bubbles just outside the damaged area. If the tape is coming off completely, cut it off squarely, just outside the damaged area and pull the loose paper away.
Scrape the wall under the damaged area to remove any soft wall compound and clear away all dust. If water has damaged the drywall, prime the seam and surrounding wall to prevent bubbling of the joint compound as the repair dries.
Bubbling may develop in the finished repair if contamination prevents bonding between the wall and joint compound. This is a common problem when water has damaged the drywall.
If there's any contamination along the crack, sealing it with a shellac–based primer–sealer will insure that your repair efforts aren't wasted. You can use a spray can of sealer on lightly damaged surfaces. But brush primer on heavily damaged surfaces to be sure of good coverage. Let the sealer dry for 30 minutes to an hour before proceeding.
Cover the exposed drywall seam with fiberglass mesh drywall tape to stabilize it. If there is movement in the wallboard it should be fixed before finishing the seam. It may be possible to drive screws into framing to reinforce construction and stop the movement. This is not always possible because framing studs and joists may be too far away from the crack to be of use. Try filling cracks with foam insulation or caulking wall cracks if screws won't work to stop wall movement.
Cover the taped seam and surrounding wall with a thick coat of joint compound.
Immediately skim off the excess mud using these drywall finishing techniques to leave a thin coat over the tape. Let the mud set and dry completely.
Apply a second and if necessary, a third coat to smooth out the patch with the surrounding wall or ceiling. See Finishing Drywall Seams with Mesh Tape and Skim Coating Techniques for more about finishing wall repairs. Let the final coat of mud dry completely and then sand the patch to feather it with the surrounding wall.