Not sure how it happened but my inclination is dry Rot. I don't see much of any mold or mildew around and the room does not feel damp or smells moldy so I'm really not sure if fungus is the cause. I'm trying to finish the space and frame a wall under this joist but I'm afraid that I won't be able to nail into it since it looks like shredded paper. I looked up some techniques to strengthen floor joists so my main ask is:
What is this? How does it happen? And how can I repair it DIY? (Some people online recommend consulting a structural engineer, but I'd rather not if possible) I was thinking of sistering the joists, but with it being a pocket joist I'm not sure if that's ideal.
Added a second picture for what I think is the dry Rot, but it looks small and not dangerous?
Thank you so much for this response. This is the kind of details i needed, thank you so much again!
They definitely picked THE worst spot. I figured pocket joist were gonna be more complicated than your average joist lol.