it's an infection, at least that's what it looks like. Are you adding iodine to the tank? leathers are very prone to infections, and iodine is a natural antiseptic. What kind of flow is the coral in? leathers need medium to high flow... so don't be afraid to blast it. At this point since it looks like the infection is taking hold, you may want to do an iodine dip. Take a gallon of tank water in a bowl or bucket and make it concentrated with iodine. I use lugols so I use about 3 drops of that. Soak the coral in that for an hour and then discard the water afterwards. Keep doing this for about a week or until it starts showing improvement. If the area ever starts deteriorating and falling apart, you may need to amputate that part of the coral. HTH