Yes, I’ve mentioned this before too.
There are quite a few Banksia prone to it.
Over-watering, bad drainage, long periods of rain and cloud all combine and you can develop root rot.
Unfortunately if the foliage looks really bad, it is often too late and the rot has spread far up into the trunk.
I would repot immediately and remove all the spongy rotten root, and cut back into the healthy roots, assuming it has some left though.
Remove ALL the old potting mix. And I mean all, bare-root them all now. Start with fresh potting mix and add 50% washed river sand to the new potting mix.
This will allow the mix to drain fast.
You can buy washed river sand from landscaping supplies or soil suppliers or sometimes gardening centres will recommend where to get it. Also you can add rocks to the mix, like about 5mm - 10mm course, to really air the mix.
Do not leave the roots until you next repot. These trees will soon die if you do.
Integrifolia is one of the only Banksia I have had survive from having bad root rot.
Don’t remove foliage. Let it sort itself out. Just deal with the roots now.
Get it out of the Bonsai pot, and buy orchid pots to immediately improve the drainage flow.
Do not over pot them either, you want small orchid pots that are just the right fit for the remaining roots.