Repot when spiking?

[katesgrey]

Hi! I'm taking care of a big beautiful phal that someone left. It has a wonderful healthy root system but it hasn't been repotted for a very long time, because whoever left it never repotted it after they got it and it's been at my house for a year or so. I started watering it more often(it had been neglected and was very droopy) and fertilizing it and it has now sent out 2 spikes. However I noticed that since I'm watering it more, some of the roots seem to be shriveled up and rotting. However if I hold off on watering it, it's leaves get droopy. So I think it probably needs fresh medium. I am wondering if I should repot while it still has so many healthy roots, even tho it's in spike? Also it's potted in fir bark. I have new bark for it. Do I need to soak the bark overnight before using it?

You can see in the pics that the leaves are dessicated, I didn't water it for about 2 weeks cuz I was worried how the roots were shriveled up. Thank you so much!