Thank you for your responses, I appreciate your help.
You could bring it up to your dentist or orthodontist, whoever is doing your braces. The stress from moving the teeth could affect the gums. I'm not sure why the gums are sloughing off though. It could be just some recession due to the trauma of removing the adjacent baby tooth. It should restore itself, at worse, when the adult tooth comes in and provides something for the gum tissue to attach to,
The blisters are going away now and the lip is much better today. However, the medial gum tissue to tooth number 23 is sloughing off. My adult teeth numbers 27 and 22 never erupted. The baby teeth were crumbling so they were removed and the chains attached to the adult teeth. The chains will be attached to braces next week. I am worried about this effecting the # 23 healthy tooth. will this tissue heal by second intention after the gum tissue sloughs away or do I need to be worried about the tooth becoming unstable due to minimal gum tissue surrounding it?
I don't think so. Its possible that you could injure the tissue but what were they using to hold your lips down? Was it their fingers or some kind of forcep/pliers?