This is a very nice demonstration of the little caverns that the new kings and queens excavate just under the bark. They enter and seal themselves off from the world using frass. In any tree there may be hundreds of similar little colonies starting off at the same time. As the colonies expand and encounter each other there are fascinating battles that happen over and over again, until the whole log is joined in one huge megacolony. The fungus-filled area to the left may have been an incipient colony that simply didn’t make it. It is a tough world for dampwood termites.