Sponge? Growing on my elegance base, should I remove it?

Stylishphora

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I noticed this sponge(?) growing on my elegance. Should I remove it?

Elegance has been in the tank for 4 months, got it from LFS, has been doing great extending and accepting food. I noticed this small orange dot when I first got the coral and didn't think much of it. I repositioned the coral a week ago (elevated in the cup, some hermits were irritating it), and noticed that orange dot had grown into what you see pictured. The flesh line looks healthy around the sponge and it's not showing any signs of stress, I fed it before the pics so its partially folded up. What do you think?

Tank: 40B about 1 year old, 2 clowns and a gramma, other corals (stylo, montis, lepto, candy cane, GSP) doing well, CUC (15 hermits, a few astrias and nassarius snails, and a green emerald crab)

Tank parameters (little fluctuation):
Ca: 430
KH: 8
PO4: 0.1
NO3: 0
Mg: 1320
Salinity: 1.025

Any and all advice welcome, thank you!

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