Some may be familiar by now with my desperate attempt to get rid of bush snails in a recently acquired Oncidium.
I finally (and relunctantly, I wanted to wait until the Spring...) got around repotting it. To my surprise the center of the plant was composed of floral foam (that green thing used to stick flowers into for floral arrangements), surrounded by bark and perlite.
I think this is a first for me. I've really found quite curious artifacts inside orchid pots while repotting (gum wrapping anyone?) but I don't think I've seen floral foam until now.
My understanding is that whichever division was made was planted into a foam (As opposed to the more common rock wool?) and then simply added bark around as the orchid grew. But if anyone knows if this is common practice, I'm so curious to hear!
P.S. it was a pain in the ass to remove as it had just become pure mush.
I've encountered it uses basically as a filler to avoid excessively large pots and unused (wet retaining) areas of media, which is I think what you're describing.
Floral foam is OK for seedlings in a large, commercial greenhouse operation, where solar dynamics plants a big role and they don’t want to water often. For an in-home grower, the most I would consider is to break it up into chunks, leaving lots of air space.
As you noted, it will become mushy over time, so be observant and repot before that becomes significant.