Sent an e-mail to a hort professor I had at UH; here's his response:
"Jon:
There is probably a hormonal basis for fasciation, probably cytokinin-related, causing the apical meristem to develop multiple growing points. The condition of "habituation" comes into play, wherein the tissues continue this growth phase even when cytokinins are withdrawn.
Some insect feeding may possibly stimulate this, as well. You may notice some leaf spots where insects have fed and it is surrounded by green tissue, Either the insect injects its own version of cytokinin or the plant responds to some substane injected by the insect. If the feeding is done at the tip of the plant and there are enough insects doing it, the response may be the production of cytokinins and fasciation. Thus, if the right insect is present, a series of plants of the same genotype could be infested and develop the fasciation. If it is not a translocated response, pruning might eliminate the growths.
As the wikipedia entry notes, the trait may be carried on, but it is not clear whether it is truly genetic (change in gene expression that is inherited) or epigenetic. Some plant species may be more prone to fasciation than others. Many crested forms of cacti are the result of fasciation and are often re-propagated by collectors by grafting. I have one plumeria that seems particularly susceptible to fasciation, with some branches very fan-shaped (see atachments).
Also, there are examples of fasciation induced by phytoplasma organisms. A lot of the distortions caused by the Aster Yellows phytoplasma (previously thought to be a virus) are fasciated or witches' broom type growths.
An interesting questions relative to the arborist's observations is whether the fasciation reoccurs if the fasciated part is pruned away. New buds that develop might not show fasciation if there is nothing (like an insect) to stimulate it, or if the effect is systemic due to excessive amonts of cytokinin, it may reappear.
Ready to come back and enroll in grad school?
Aloha,
Richard Criley"