Phalaenopsis stem rot progression

[aliceinwl]

A few months ago I bought a NOID that looks and smells identical to Jiaho Ho Summer Love at Home Depot. It was a crispy critter in moss with 4 leaves and a huge spike. The leaves, however, were very yellow. I watered it and repotted into bark and discovered it actually had fantastic roots. The upper two leaves gradually greened up a bit, the lower two continued to yellow until they both dropped (probably a month or so after the repot).

This was unusual so I carefully peeled off the basal sheaths of the leaves that had dropped and discovered that the stem looks to be completely rotted. Based on the improvement of the upper two leaves there must still be some connection to the roots. The rotted area is dry and does not seem to be progressing, the roots are still in fantastic shape.

I’m curious what Phals in this shape typically do. A basal keiki seems like a good bet since the roots are so healthy? Will this condition increase the chance of a keiki off the old spike? I was going to cut it off, but if a keiki is likely I’ll leave it on.

In the attached photo, the plant was just watered, hence the wet bark. It looks over potted, but I had to use that pot in order to fit all of the roots.