Pictures below: I took back a phalaenopsis after gifting it to someone who couldn't keep it after she was moved. It was almost done blooming. I noticed the roots were dying / rotting. I cleaned it up and repotted it but kept the spikes, and it has grown a ton of new roots plus a baby with two flowers on one of the old spikes! I understand that orchids can make a new baby if they think they're dying, and this one obviously did.

It's been very exciting to observe this new baby. At this point the baby leaves are pretty big (like a mini-orchid), but there is only one root and it looks just like an aerial root. The leaves are still growing, but the root is on a stand-still and has looked the same for maybe two months now. The flowers are in very good condition still. There is also what looks like the tip of a new spike growing from between the original leaves on the mother plant, but it never developed and it seemed like the plant changed its mind on it and decided to make this baby instead. Possibly this spike will take off once the baby is gone?

On removing the baby:

1. At what point do I cut it off from the mother plant to let it grow in its own pot?

2. Should I cut it right at the base of the baby, where I'm pointing with a pencil?

3. Do I plant it as if it's growing sideways right now, so that the one areal root is down into the bark and leaves straight up? How much of the base of the plant needs to be sitting inside the bark?

Cut here...

... and here?

Plant like pictured below, leaves up and aerial root down?

Below: In the center, brown / red'ish tip of what I think is another spike that never took off.