It's not really fungus. The white fuzzy stuff is bacteria bloom--basically there are tons of tiny loose, decompose-able particles on the surface of the wood, and when you submerge it in warm water, the bacteria naturally present in the water and on the wood itself go to town and the bacteria population explodes. Eventually they'll finish these easily-consumable particles on the wood and die off once the food source is gone. But it is totally harmless...just ugly.