It sounds like you've had this a while and not seen it before (???)
This looks normal to me! ... he's *pooping* waste. This tells you he is happy and getting enough food. If excessive said:
Ahhh, I did see the blue damsel eat some of it. I moved it back to my nano while I performed a water change. I'll keep an eye on it. Since the move back to the nano, it stopped pooping. Thanks for the response.
~Matt