Ed
The brown spots look more like sun burn. It might just be "corking" which is what they call bark on the lower section of succulents like cactus and Euphorbia trees.
I am more worried about the lowest section that I see. It looks skinny. It looks smaller than the
growth above. It should be brown like it is, but it should be the same size at the part above the ground.
Go ahead and make your cut and start the new plant. Grow the new cutting in the same light it is in now and move the mother plant outside to make it happy. You should get several new branches on the mother this summer. You can move the new cutting outdoors once it is established and has grown about one inch.
Bring them indoors before the first frost.
