I have grown a number of plants in pure sphag -- including phals and catts. In all but one case, I leave the sphag only lightly pressed into the pot. ( I will note, I never tightly pack down my media ... even with bark/coco chunks.)
I firmly believe, though have never tested my theory, that the tightly packed sphag is a leading cause in root (and consequently plant) death. As has been mentioned, often the roots in the center of a tight sphag ball are dead. Likely due to lack of air. instead the living roots tend to all be along the inner side of the pot or just beneath the sphag.
How do the professional growers do it? My guess is that it comes down to their growing conditions and culture. Most sprinkler/spray systems do not drench the plants. Instead, the short duration sprays likely just moisten the media -- particularly when it is densely packed. In addition, greenhouses generally have very good air circulation which most certainly helps.
The one and only time I had a plant in tightly packed sphag was when some friends had bought a cheap one in bloom from Costco. After it was done blooming they gave it to me. When I went to unpot it, the entire plant with its pot shaped mass of sphag came right out of the pot. Since it was not a plant I cared much about (standard white phal) I decided to experiment for kicks. I did not free it from the moss block. Nor did I return it to the pot. Instead, I set it on a large pot saucer. When I watered, I just poured some water over it. Most of the water ran off the sphag and into the saucer. I let it sit in that run off, absorbing the water that was there. There was not enough water for the sphag to get fully saturated. The plant did just fine. After about a yr, I donated it to an orchid society -- still growing as an unpotted plant in a sphag block.
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