Looks like something stung it very badly. How long did it take to happen (overnight? a week?) Can you describe it? Does it keep receding? It's hard to guess off those photos.
Typical reef hermit crabs shouldn't cause that sort of damage unless the coral is dying, the crabs are starved and you fed the coral, or someone sold you the wrong sort of crabs. Crabs are opportunistic, but coral usually isn't their first pick unless something is wrong.
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