Yea that is definately dying at the base. I have actually saved some sps pieces from tissue recession etc that I got from other people. I actually fragged above the receeding/dead tissue then glued it where I wanted it and fed it phytoplankton and zooplankton and made sure it got high lighting and they all encrusted very nicely and grew well. Personally in your case I would want to do the same. Fragging it above the dead tissue will hopefully help it feel like it need to grow and encrust faster and reverse the recession. Just though I'd throw that idea out cause it worked for every sps that was having similar problems. Good luck.