It looks like some of the coral tissue is damaged and peeling away from the skeleton? That could definitely contribute to the coral looking upset. I would watch that for infection until it heals Overall it doesn't look that bad though. Candy canes are really hardy.
Algae should never be able to grow on coral tissue. If you see brown stuff on the tissue the coral is either pooping (if it's being expelled from the mouth) or it could be a bacterial infection like brown jelly. It could also just be some debris that was floating by and got stuck on the coral, which is what it looks like to me in that picture.
If you can gently blow it off with a turkey baster, I wouldn't worry about it unless it comes back. If it comes back and looks like brown jelly growing on the corals tissue, my go-to is an iodine dip.
Another more general point to keep in mind is that too much light can kill a coral quickly, whereas too little light takes a looooong time to cause a problem. So, it's always best to err on the side of too little light and slowly increase from there. I would leave it be in the lower light for a while.