I've been curious about this for awhile. It's been there about 6 months, I've had the cactus for about a year. It was bought on a dollar shelf with three others, the other two died shortly after being brought home but this little fella survived. The poof has been growing. Is it a bloom? A deformity?
It is either a bud (flower to come) or a branch. But if it has been there for 6 months, it may be a bud that aborted. Take a stick & gently touch it to see if it will fall off easily. If it doesn't, leave it alone & watch (or don't watch) it grow.