That is your caliper slide bolt and you cannot install a bigger one since if it a fairly tight fit in the caliper slider. You have two options - replace the knuckle or install a heli coil to resore the threads. I had that happen on mine but didn't find it until I had finished welding and resurfacing the divots in the pad contact areas. (I see you have some divots that need attention, too.) So I installed a heli coil. Takes about 3 minutes, just drill it out, tap it, and install the heli coil and break off the tab.