I checked the levels in the tank, my ammonia, nitrites and nitrates all rest at zero. I don't see any sign of spores being released either. At any rate, I'm going to do another water change and keep an eye on the levels just to be safe. I hate to lose that piece, it's one of my favorites. I'm really scratching my head on this one.
It is in the display tank, but it's confined to the sand bed, for now..
It's not the grape caulerpa, we have some of that too, they look similar, but have some distinct differences in appearance. This once doesn't have spherical bubbles, it's more like mickey mouse ears stacked flat and evenly on top of each other.