Cause of white rot on floor joist
As discussed in the comments the cause of the white dry rot had something to do with water and moisture.
Since the damage was only on the surface, there should be no reason for grave concern as long as the area can stay dry in the future. To prevent further potential rot this terpentine based lead-free paint was used to treat the three reachable surfaces of the beam. This should be enough to prevent future rot.