What is going on with my grass??

Looks like earthworm castings. LINK. Don’t know why it is doing in only the centipede areas of the lawn, unless you have higher concentrations of soil organic matter in area of the lawn, higher soil moisture, etc. By and large, having a high population of earthworms is a good thing. Free soil aeration.

I’d almost have to think something else is in play causing the the centipede to thin out - fungal disease, insect issue, etc. - other than earthworms causing the issue. Is that area of the of the lawn unique in anyway you are aware of, e.g., large tree removed and stump ground up, poor drainage, etc.? Have you have sod web worm damage in that area? Do you use lawn fungicides, or lawn insect control products in the lawn on a routine basis?

Best I can suggest is for you to send those photos and as much explanation as possible to Dr. Ron Strahan, turf and weed control extension specialist and professor, LSU AgCenter, rstrahan@agcenter.lsu.edu and ask for his opinion on what may be occurring and any steps you might take to resolve it. Be sure to tell him of any routine management programs you have on that area of the lawn - herbicide, fungicide, insecticides, fertilization, height you cut your grass etc., so he has as much info as possible.

I have a centipede front lawn and I understand how long it takes centipede to fill in a damaged area compared to St Augustine or Bermudagrass.

There has been an infestation of sod web worms this year. My back yard died in 2 weeks.
Sprayed talstar, which is a good idea anyway, twice 7 days apart. Grass came back quick. If you do this and little moths fly up everywhere that's a sure sign you have em.
Hope this helps