Is it salt build-up? Or fungus. I wait for the fragrant for a long time. Now...
I'm thinking to transfer to bark culture? I think about LECA but people said it not good with oncidium and miltonia since salt will be wick and rot the bulbs.
I think it may be rotting. I don't know if it's possible to save this plant - but the two older, smaller pbulbs may be salvageable, and might be able to initiate new growth. Definitely pot into bark or coconut husk chips - or if you must stay with sphag reduce your watering, and/or use a fair amount of perlite mixed in for aeration
My flavescens is doing well in coconut husk chips and perlite mix. It gets near (but not quite) dry in-between waterings.
I don't think that's salt build up, it looks to me like fertilizer burn and media kept too wet.
I have both oncidium and miltonia in s/h and they are doing wonderfully, as long as the pots are flushed routinely and you don't let the leca dry out salt is not an issue.
I would not advise transferring this plant to s/h until new roots are actively growing.
Joann