I have some of those too on a couple of my trees. What to do depends on how you want the tree to look overall and your location. I live in the deep south and some of my oldest trees (6 or so years) are shaped like yours, but are showing signs of sunburn on the trunk. Now that I can see what the sun has done to my trees, I am allowing the branches lower on the trunk to grow. The growth will protect the trunk from the hot sun. Sunburn turns the trunk black and the bark cracks which I am experiencing. I am seriously considering painting my trunks this summer as we are already having 90* plus temps and it's only the beginning of June. If you allow the growth to grow, you are giving yourself the opportunity to have more fruit in the future which is a good thing.

Thanks. I just called grower who recommended break off sprouts between 12- 18 inches of soil line. So then my question would be what about the 5 inch space between graft and 12 inch mark. I am in s florida so I was thinking of putting some 1/2 space hardware cloth around trunk especially since I've seen a rabbit milling around. Then I could put fabric around that. Anyway more concerned about whether to branch or not for health of tree.

It shouldn't affect the health of the tree at all. But if you're planning on planting it in the ground some day, then I'd leave the trunk bare. I have potted citrus up here and I like them to branch lower down. But that's my personal preference. If rabbits are an issue, then why not limb it up?