The title should read peeling* :p

If occurring on a branch, more likely to be sunscald than anything else. The bark on Japanese maples is very thin and can be easily split or ruptured by winter sun hitting frozen branches, causing expansion. The trees usually survive this issue quite well although with some disfigurement to the appearance. You can carefully cut off the damaged/loose bark and the tree should heal itself.

Thanks for the reply Gardengal! I considered the possibility of sun scald but the peeling is mainly on the underside of the branch. It has also spread to the trunk as well. There have been few sunny days this winter and it seems to be spreading regardless, might there be another possibility? In the second picture from the top there you can kind of see some discoloration where the bark has peeled and i thought it kind of looked fungal? One thing maybe worth mentioning is that there is a grape vine very close in contact with the maple that had powdery mildew for the first time last summer, I'm not sure if that's relevant at. The maple showed no signs on its leafs.

Don't worry about powdery mildew - that will not affect the bark at all. The bark split with callus running up it (especially clear in the last photo) looks like classic sun scald damage. Is the wood hard and firm in that area or under any other open barked location? I don't see any obvious signs of fungal issues but I could be missing that from just looking at photos..........

OK, that's good news. Yes the wood is hard and firm, it doesn't feel like it's soft or rotting at all. I am hoping sun scald is the issue and that it doesn't spread any farther. So when i carefully remove any damaged bark that falls off easily should i try to remove it all the way to the edge of the bark that is still alive? Does it usually re-grow over these areas? Is there anything else I can do to help it out?

The same thing has happened to a lot of my Japanese maples and has been diagnosed as squirrel damage. I see no correlation to sun damage on my maples. The damage is on different sides of different maples. Sun damage would be on exposed south side.

If it wasn't for that long stripe of callused wood in the center, I would agree with you, Mike. Squirrels favor the flexible tender bark for best building but they seldom will actually damage the wood under the bark enough for it to need to form a callus. That is indicating something more pervasive than just squirrels :-) If not sunscald, then perhaps some other type of mechanical damage.

Don't pull off the loose bark, Cut it off cleanly with a sharp knife back to a point where it is still firmly attached. It is not typical for the bark to grow back but it's not being there won't further hurt the tree either.