The leaves are the beginning of a "baby" or keiki. In several months (on a healthy plant) it would develop more leaves and finally roots. Eventually you would be able to cut the spike and have a second, identical plant.
Unfortunately, the parent plant is probably not going to be able to provide enough nourishment (because of the badly damaged root system). If the parent plant dies before the keiki is well developed, they both are gone. I would sacrifice the less viable plant (the keiki) to save the most viable plant (the parent). Even with this, you have a long road to recovery. You have to decide if you want the learning lesson of trying to save it, or if you just want the enjoyment of healthy plants. I personally like the challenge of bringing something back from near death, but I have the luxury of a large enough collection that something is always in bloom to bring joy. If I had only a few plants, I don't know if I could play doctor. There is a chance that this plant will not survive regardless of what you do. You can save yourself grief, but learn little, or you can have a "learning experience" with maybe some grief and maybe some joy.
The problem in giving advice is that there are no absolutes. What works under the way I grow orchids may not work the same way under your conditions. If we all grew in chambers where the media, the humidity, the light cycles, etc were all controlled and matched, exact advice could probably be given. Our worlds aren't nearly that perfect, and on top of it, we're all human and subject to our own beliefs, opinions, and prejudices.
All you can do is read the opinions, make a choice, and STICK WITH IT. If you change your conditions every week, you'll never find what works for YOU (and that's what is most important).
The short version - cut the spike - sorry to go all philosophical on you.
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