Often an answer that "needs improvement" is accompanied by a second, completely acceptable answer. Improving a defective answer would make it similar to the "good" answer. What to do …?
"What to do...?" Do you mean what should we do if we notice that this has happened? ...or should we edit a defective answer as opposed to adding a new one?
If we notice that this has happened, I would suggest that we leave both answers as they are (unless you feel there is something else going on... then, perhaps, add a comment).
Whether we should improve a defective answer is a bit more problematic. Certainly if it is a simple correction that could be written off as a "typo" then I would say "go ahead and edit". However, if we are talking about a substantive addition or modification, I would tend to write a new answer. Flagging an answer as "Needs improvement" (etc.) permits the originator to correct the answer themselves (arguably a good learning process); however, depending upon such corrections to be made is unrealistic and penalizes the person who asked the original question.
That's how i see it anyway.