?problem with young apple tree

I have a young winter greening apple tree on a dwarfing stock which is approaching its second winter. I have just removed the stem protection tube to find that the bottom of the tree has developed shoots and strange lumps  It is also a lot thinner than the stem above.

Anyone any idea of what is going on, what I have done wrong and what I should do to remedy? 

Thank you Lardman. I have quickly googled it as it doesn’t sound good at all. 

It looks as if it is my fault; using a tube to protect the young trunk has created the conditions for it to happen. I have removed everything from around them but have 2 questions which I hope that someone can answer.

Should I remove soil from the stem in case there are more of these things that I cant see below the surface?

What should I do with the 3 burr knots that have developed into shoots?