I was a little nervous about breaking it but could try that with a small flatip. It must have a clip of some kind maybe to stay attached. The reason for removing it is when I put in my interior window inserts this winter it will give me enough space to use them. Ordering from the site below:
So bedroom window are egress and you will be installing fire traps. Other than that they look great.
For bedrooms I would want something easy to open in an emergency. Maybe the same thing on the outside.
If it won't come straight up prying equally both sides at once if likely has a set screw. That hole looks like a good place to hide one. Here's a thought! Most manufacturers use hex heads on tiny screws like that. Could it be you just have the wrong tool and it's almost working?
If in doubt try shining a light in the hole and snapping a pic with your phone. Then blow it up and maybe it will give you a clear idea of what's in there.
If it's really stripped in that recessed hole there's no doing the slot cut dremel tool trick. You will have to us a drill the size of the hole to drill the head off the screw. You're gonna have to take pains to keep it nice and straight and centered while you carefully dig odd the head. Yes you will do some damage just try to minimize it. This will work on the Hex and Phillips screw types because they have a depressed center to hold the drill in place. For wrecked slotted you'll probably have to use a Dremel tool with a tiny stone or carbide tip and grind it down. Sometimes there's no choice but do a bit of damage and cover something up afterwards or just buy a new crank.
That may be the best option anyways. Make sure you can get one first then just mangle your way to the screw head and chisel grip the screw off. Those studs it sits on don't ruin easily so there's no chance of wrecking the expensive part.