This was a tricky one! Well done to paleomanuel for a superb answer, recognising that this was a magnified picture of fish’s gills.
Normally when we take cross-sections through the gills, we should see thousands of finger-like projections called lamellae. Like the thousands of alveoli in our lungs, the lamellae massively increase the surface area available for gas exchange when water is flowing over them.
In this disease, billions of blue-purple staining bacteria (Chlamydia-like species) are replicating within the epithelial cells which line the gills and skin, causing them to balloon out and form cysts. Because of this, the disease caused by these bacteria in the gills is called Epitheliocystis.
It is quite a rare cause of disease in wild fish, but occurs more frequently in fish farms because the high stocking densities mean that the bacteria can spread more easily. Their thickened and damaged gills means that affected fish may die because they are unable to extract oxygen efficiently from the water. Inflammation of the gills is called branchitis (not to be confused with bronchitis! = the inflammation of the airways in the lungs of mammals, birds, and most reptiles).