Repot Phalaenopsis japonica?
 

My P. japonica has grown an offset - below the surface of the media in the pot - I just noticed it when watering.

Should I -

Leave it as is?

or

Repot it higher in the pot and let the offset escape from the pot?

i'd probably repot it a bit higher in the pot, to be on the safe side.

It is telling you "Mount me! Mount me!".

Whatever you decide, keep them together!

I agree that mounting would be a perfect solution, but not all of us can maintain mounted orchids. Raising the plant in the pot would be a good compromise.

I don't have the time to look after mounted plants, so once it has finished flowering I will raise up. Thanks to everyone who replied.

I think it is too buried... I understand your concern but you'll need to raise it really high to save it. I think the mother plant wouldn't mind.
You could also make a hole in the pot so that the leaves can come out.
The alternative is to let it be and see what happens.