Heartwood

Pholiota squarrosa

...found on a walnut species (Juglans ailanthifolia).

After looking up Pholiota squarrosa in Weber & Mattheck's highly-recommended Manual of Wood Decays in Trees, it appears this fungus is a simultaneous white rotter. I've been trying to get my head around rot types for a while now, and as far as I understand simultaneous white rot attacks both the lignin in the wood (which gives the wood stiffness, especially radially) and the cellulose and hemicelluloses (which give the wood bending strength, as well as strength under compression from the weight above). So, the degradation of cellulose first makes the wood brittle, and then degradation of lignin softens the wood and removes strength.

So as (if?) the decay progresses in this walnut, it could suffer a brittle fracture in strong winds (with the loss of cellulose), then become at risk of ductile fracture as the lignin is decayed. Plus, there were clumps of fruiting bodies on both the north-west and the south-east to the trunk, which I think can be interpreted as showing decay could be fairly advanced and is not limited to just one side of the tree.

Does anyone who  might be reading this know if I'm interpreting this along the right tracks?