It appears that the worm has aborted its tube. The left tube is empty -- the right is the rest of the worms body. It's definitely a sign that something isn't right -- extremely poor water quality, high amounts of stress, and too much current could all cause this to happen. I believe it is most likely poor water quality and stress which cuased this to happen. Putting it in the sand would be a good idea.
By the way, can you give us a list of your water quality? Don't say perfect; please tell us what everything is. I want to know Ammonia, Nitrite, Nitrate, pH, temperature, and salinity.
Graham