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Before we get started, we can call a vehicle, either a car or an automobile--and agree that they're the same. But if you then talk about a Cadillac while I talk about a Kia--how is that discussion going to progress?
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Thank you Bob for making my point. The discussion would go nowhere fast, if we begin with "All sprouts above ground are water sprouts." kind of like saying all humans are Huguenots.
We can only guess the cause of the stem sprout--other epi's are popping out unrelated to nodes or bug holes. But the treatment is to avoid damaging it while deadwooding the (severely declining) tree.
Here's another type of sprout, originating below wounds made by imo inattentive personnel when they whacked two shoots that grew below a severely cankered dogwood stem, on the right. On the left appear to be two young stems that arose in response to that same canker, and were spared the woodsman's ax.
Anyway, I'd let em be until sprouting slowed, then thin to train new branches/stems. 1/3 at a time is a good starting point for planning.