not quite sure how to explain what he is doing but mine did the samething under one of my rocks after removing all the sand. He made a cave like home and moved some things in. Pretty cool to watch and I loved it when the lights went out because he retreated into his cave.
On a side note, how long have you had your tank established and how well is your pulsing xenia doing under your current lighting. I have been looking to add some more coral to my tank and the pulsing xenia is one I would like but never thouht I had enoudgh light. TIA