it looks strange, have no idea and I would strongly recommend to cut it off before it starts to spread. Could be a fungus - think I. Yes, cut it off looks insane.
Pods of Epidendra are often filled with not-viable seeds when itīs about a self-x. If itīs viable you can try to sow the seeds around the motherplant. It often cares for the correct mykorrhiza around its roots, so maybe you have good luck. Moreover in many cases Epidendra donīt require a mykorrhiza for the germination. Go on trying.