This is root rot.
In a small plant like yours the roots would be a pale gray and break or smash easily before the rot gets into the caudex like it has here. You can see how the rot worked up the roots and into the caudex. This happened because the plant got wet just before the temps dropped for the winter. Then it sat in cold wet soil for a month or two.
As bad as this looks, the plant survived after trimming away all the rot, letting the surface dry for a few days and putting it into fresh soil.
