Myconid reproduction
Myconids reproduce from spores. Myconids also use spores for other purposes, such as communicating, but the reproductive spores are a different sort. When a spore falls on a suitable substrate, it starts growing hyphae. When the hyphae contact hyphae from another spore of the correct type, the hyphae merge, and start growing a mycelial mat. Eventually new myconids will emerge from the mycelial mat.
In human terms the "type" of spore is its gender, but myconids don't think of them this way. For many myconids, the "correct type" is their own type. For others, it needs to be a specific other type; for others, it is one of several other types; for still others, three or four types must converge to start growing new mushrooms.
As the nursery attendant mentioned, the myconids can reproduce with other mushroom species, to produce an awakened version of that species. The myconids can decide whether the offspring will be awakened or not, although it is not clear to the party whether this has to do with the environment in the nursery area, some kind of early selection process, or care of the mushroom pins in the nursery area. Most mushroom species are consistent within the species about which genders are needed to reproduce; the myconids are unusual in that this varies between individuals within the species. There are hundreds of possible types; a strong colony will have all types represented so the colony can easily make awakened versions of any mushroom in the forest.