Both airlines damaged the bag but the 2nd airline replaced it. Therefore, let the first airline go.

It is unethical to try to get money from the 1st airline. If you do, you should then refund a portion of it to the 2nd airline. Since this becomes too complicated and wastes too much time, it is acceptable to withdraw your claim from the 1st airline and let the 2nd airline's compensation (replacement) suffice.

The 2nd airline probably doesn't mind even knowingly replacing the bag because it's probably more costly to repair just their damage (and leave the pre-existing damage alone).

You could ask for compensation from the 1st airline but it would reflect poorly on your character.