Open grain-- yes. It does vary with walnut, but it is not a closed-grain wood like Osage or maple.
Soft? Perhaps. Compared to, say, cocobolo, purpleheart, lignum, ironwood, bocote, etc... it is REALLY soft. But compared to basswood, soft maple, and American Cherry, it is harder. It does NOT rank among the hardest woods in the world, not by a long-shot, even when in the best of conditions.
I recently roughed out two bowls from spalted walnut that were almost soft as cork. Final turning on them will be interesting, to say the least[B)].
If the wood is old and has been exposed to moisture, it may be well along in the deterioration process, while still having some color.
Wood that is decaying has a distinct smell, especially if it is spalting. If you know that smell, you should also know to throw on a respirator b/c the spalting fungi can sometimes spalt your lungs (not nearly as pretty as spalting in the wood).