That leather looks pretty hopeless. The fact that fluid came out of it and now you have an ammonia spike seems to confirm this. You could put the coral in the QT just to be certain that the animal is dead before ditching it, however, you can not do this with other fish in the QT--as the fish would succumb to ammonia and decaying coral as well.
Do you see any part of this coral that looks healthy? If not, then don't propagate.
FYI: Soft corals don't really need hard foods, such as silversides, etc. They live off of suspended organics in the water column. They can benefit from iodine supplementation.