As stated, yes it is a sponge. I wouldn’t remove it. Almost any coral will outcompete them for space. I think the issue with the frogspawn was likely due to a multitude of issues, not just a sponge rubbing up against it.
Most species prefer darker zones of the tank and will not do well in high light settings.
so whats wrong with it? its been happy and is growing a new head... still open but not fully.