When Caido was dismembered, this form was the shape his body initially took on.  It was only after his volatile emotions subsided that the remains of his body settled into the smaller version of him.  Like the Others, Caido is capable of shapeshifting, though he will seldom do it.  When he does shapeshift, this form is what he will typically turn into, and usually only in combat situations where his shorter stature would put him at a disadvantage.  This form's more monstrous appearance isn't a conscious decision, and is more of a result of the strong emotions that brought forth this form in the first place. Caido's body has stretched to a form much taller than he was as a human.  As such, the material that makes up his body has been stretched out as well, unveiling the true nature of his body.  Though he has become more spindly, it has not affected his physical strength.  What this form provides mostly is a boost in agility and reach that his natural, more stout form does not have.  While this does make him a larger target as a result, 9 times out of 10 it's a worthwhile trade-off.

Incomplete Spine
In this form, Caido's lack of neck is more apparent.  It was a conscious decision on his part, as it makes him immune to any disruptions that may have been caused by attempts to behead him.  While beheading him in this form would not have had as devastating of an effect as it had in the past due to the current malleability of his body, because it was the way he died previously it's a bit of a sore spot and he would rather not experience it again.

Exposed Body
As the malleable material that makes Caido's body is stretched out to manifest this form, that means the organs inside of him are exposed.  Since they're non-functional, this isn't dangerous to him, but he is aware that it's grotesque.  Having become quite attached to his smaller, cuter appearance (and wanting to uphold a reputation for being small and cute), he keeps his sweater zipped up and despises being touched or held when in this form, as it'd be easy to feel what's under his sweater with close contact.  The exception to this disdain for being touched is when dealing with his sons, 85 and 64.  Caido will, though seldomly, use this form to properly hug and hold his sons, as this form is closer to their heights, if not taller than they are.  The Others don't seem to mind.