I had some deer damage on a sweet bay magnolia tree. After a week or so of covering the damage with the pictured white tree guard I noticed all these black spots underneath. What are these spots and should I apply something to remove them?
First, remove the tree guard - its doing nothing for the tree except providing a home for insects and in this case, fungus. Those black spots are fungal in nature. The next thing you'd see if you left the guard on would be rot - and you'd lose the tree.
Now, lets look at the damage. It looks like you have some deer rub on that trunk and not a canker; the deer rubbing looks to be at least one year old, based on the callous forming on the edges. This is actually good news, because a canker that size would probably kill the tree. Most trees can recover from a deer rub of 50% of the trunk, and I know of a ginkgo and a chokecherry that both recovered from 80% bark loss, so your tree should be fine if you do the following:
Clean up around the wound, removing all of the torn bark. The object is to make the wound easy for the tree to heal. It will heal by growing new bark (the callous along the edges of the wound) over the entire barkless area. This will take years.
Keep the wound as sunny as possible and open to the elements. Putting a guard on it will, as you've seen cause problems with fungi (due to lack of sunlight and trapping of moisture) and insects (due to protection from predators and, when rot starts, ease of access to the heartwood).
Check the wounded area periodically for rot or other issues. You will probably never find any problems, but it never hurts to be vigilant.
Be patient, as it will take years for this to disappear.
Protect this and other small-diameter trees from deer using cylinders of "hardware cloth" (quarter-inch steel mesh). I can give you instructions on how to make these if you leave me a comment.