I've seen the same thing happen with Candy Cane Coral and others, but only when the coral was either dead already or completely on the decline. From what I've noticed, if there's any life left in a coral and the coral is still generating its outer "coating" then the coraline doesn't overwhelm it and the coral will be able to come back if provided conditions in which it can thrive. So, from what I can tell, if the coraline algae is invading the coral, that's a sign that the coral is in obvious trouble for one reason or another. I'd consider moving the coral immediately into a place that may be more suitable for it...either into lower or higher lighting and also into a place with more or less flow, all depending on the needs of that specific coral. On the other hand, I have some Candy Cane Coral in my reef right now that had for one reason or another declined suddenly and then been invaded by coraline algae...so much so that it grew right over the head of some of the branches. I had mounted a number of different color-morphs of Caulastrea with epoxy and all of it began to shrink back to near nothingness. I never knew why, but moving them would have been a real problem and if I dislodged them from their epoxy mounts, I more likely would have discarded them all. Some, like I said, were completely overwhelmed but with others, the tissue had shrunk back to the very center of the heads but remained in that pathetic state. In those cases, the coraline never covered them. I had left them there for about a year when suddenly all of those heads that had some meager tissue left in them came back and are flourishing now with significant new growth and they are even splitting into new heads. It seems to me from this, that the life left in a coral even if weak, can withstand the coraline algae.
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