
Certified GKH Gardening Expert
It is either fungal or bacterial. It could definitely be related to watering, as well. Since those stones cover the top, it can be difficult to tell when it needs water. I would advise using a moisture meter, and waiting until the soil is completely dry down to about halfway into that container before watering again. Be sure that all extra water is removed from the outer container after doing so.
I would treat with a fungicide, as well.
Here are some articles that will help:
https://www.gardeningknowhow.com/ornamental/cacti-succulents/scgen/cactus-going-soft.htm
https://www.gardeningknowhow.com/garden-how-to/info/using-fungicides-in-garden.htm