Answer: The American fandom actually has had this one wrong for quite a while
When he was young Clay didn't have an octopus beard or the nickname octopus, rather his nickname was something like the academy's walking 3rd rate gossip tabloid.
According to the Novel Washu at the academy they have an animal they also call an octopus that lives inside a shell, the male lures females with tricks and then pulls it in an mates with it.
Clay had chosen to be a guide for freshmen like Airi was in yosho.
One of the girls he was assigned to accused him of trying to take her home to have sex with him.
The school board however knew that everyone hated Clay in general so they were extra cautious with these allegations and didn't make any ruling on them.
When washu hacked his files she found a sex tape of the incident that clay had made with the girl.
So washu made it so that this video played when clay went to accept an award given out by the academy.
Clay was suspended for a few months and this eventually led to him getting booted from the academy as well as earning him the nickname octopus.
as for his beard... well Dr. Clay always had bad tastes in fashion.
Who knows what happened to his eye... why do all of tenchi's villains have messed up eyes and arms?
Clay had chosen to be a guide for freshmen like Airi was in yosho.
One of the girls he was assigned to accused him of trying to take her home to have sex with him.
The school board however knew that everyone hated Clay in general so they were extra cautious with these allegations and didn't make any ruling on them.
When washu hacked his files she found a sex tape of the incident that clay had made with the girl.
So washu made it so that this video played when clay went to accept an award given out by the academy.
Clay was suspended for a few months and this eventually led to him getting booted from the academy as well as earning him the nickname octopus.
as for his beard... well Dr. Clay always had bad tastes in fashion.
Who knows what happened to his eye... why do all of tenchi's villains have messed up eyes and arms?