
Welcome to TRT!!!
As long as the leather is not melting away it should be fine. Leather corals go through a molting process as they grow. They will not extend their polyps for a while, and then get a waxy looking appearance. This is the old skin layer, and you need to have fairly good flow on them in order to help blow it off the coral. Once it is done sloughing off the outer shell, it will be larger and fuller than it was before.
I have a picture of my toadstool leather in the middle of sloughing off that outer layer somewhere and I can try to dig it up for you if you want to see what I am talking about.