What is this white growth on this young walnut tree? Is it a disease or a harmless fungus? 

If I remove one, a visible hole is left in the tree. 

Other nearby trees do not have this so far (there are 30 trees in the garden). It looks to me like it is growing out from inside the tree. It is present only near the ground. It is not present higher up in the tree. 

The tree had leaves before winter, so I do not think it is dead. 

[![enter image description here](https://i.stack.imgur.com/GTE29.jpg)](https://i.stack.imgur.com/GTE29.jpg)

[![enter image description here](https://i.stack.imgur.com/57piT.jpg)](https://i.stack.imgur.com/57piT.jpg)

Update: The tree has died. No growth, no leaves this spring.