Candy canes are pretty hard to kill as long as your parameters remain stable. They grow fast too, so I vote they are new heads. Everything else in the tank OK?
Its splitting for sure! if it was dying it would not be puffed up like that. When you loose a head they shrivel up and waste away. One thing with candy canes that I have experienced myself is that if they are in a area of moderate to heavy flow and its pushing the heads in one direction they will start to recede. I placed mine along the sand behind a rock wall that is is kinda closed off from the strong flow within the tank and they have been splitting quite quickly!