I'd guess too cutting the spike is the best option, in your 3rd pic there seems to be some browning discolouration to the spike near it's base. And you may have to dab some cinnamon on the cut to keep it from becoming infected.
I've not used the sphag-n-bag technique, but my sick Phal had a few of good roots near the base of the leaf structure the rest having to be cut away, a good bit over 75% of it's roots had to go.
I kept it in clean water for a day or so while I soaked so Bark for the re-potting (It still Lives and is growing a new leaf now.
But my concern having looked at the Pics is the remaining roots look a bit too brown for my tastes. (I'm hoping that's just something to do with the pic exposure though)
I'm not sure if rooting hormone may help here? But it's a consideration to encourage the plant to shoot some new roots out. But I'd wait for confirmation from some one else about that.
Didn't try it with mine, just got it into a proper care routine and the plant did me proud.
(After reading other threads and folks experiences I now retract this statement)
My gut tells me that you need to sphag-n-bag with this one, but having not yet had to try this method I can not say for certain.
I'm sure someone else will pipe in soon enough though
Wishing you all the best and hoping you can revive you sick plant.