The "spongy" grass is almost always a thatch buildup, not soil eroding from the original sod. The lawn was most likely over fertilized and watered which causes excessive growth. The other cause of spongy grass would be the wrong cultivar of st Augustine being used, I see it happen if you plant Palmetto St Augustine grass in full sun when it should be Floratam in full sun. Both of the recommendations of top dressing(with plain sand) will help for a while but if the cultural practices aren't corrected, then it will happen again within a couple years. I hope this is helpful.
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