Very cool! When I recently took my tank down to move to a new house, the original set of Durso Standpipes I made some 7+ years ago had near 2 inch thick of sponge growth on them. Amazing. The chamber had so many tube worms I was unable to see into it. Nothing as cool as what you found though.
Most likely, a frag cames off (some crab and hermit likes to rip out soft corals), and get stucked in the overflow. It survived, and get to be what you see now.
Npaden, I remember about 6-8 months ago when I turned my lights on around midnight after they had been off at ten I noticed a lot of "eggs" or something like that floating around the tank. Maybe that was what it was??
AJT, Tubastrea reproduce by asexual reproduction. They incubate little baby polyps inside the larger polyps and then release them into the tank. Like most everything else this is a sign of good health for your coral.
The trick is then finding the little babies and getting food to them. Your baby found a good spot to settle on the overflow and is getting good flow and evidently good food flow by it to be doing so well.