It's macroalgae it's not putting out polyps someone is seeing something and confusing it for something else (such as a colony of spaghetti worms living in the algae). It is beyond a doubt macroalgae whatever "polyps" may be present are probably some other nocturnal inhabitant living within the clump of algae. Just cut off a small piece and look at it outside the tank so you can 100% ID it for urself, it's algae it will grow back.
ok, sory this thread went so far. Its a microalgae, was trimming and gave it to a friend to check out who does some biology work. Has these little polyp holes that secrete a mucus, filters the water then sucks back in at night. Can't find the scientific name, but its still pretty cool and sorry again that this thread went on longer than it should have. I'll be fragging some of it when i transfer my corals on the tank change. PM me if you want some.