Hey Kelly, long time no see.
My torch and frogspawn would both drop pieces of tentacles, and both were growing very well, and healthy.
The pieces never developed into anything; I never saw any settle or grow. Most of the time they floated around and got stuck in an intake, or fish would nibble at them. A form of defense, or reproduction mechanism, I don't really know, but I really don't think it's any sign of ill health.
I believe that anemones can do it on occasion as well.