It looks to me like an over stretched crop. How much and how often are you feeding it? If you don't feed him for 8 or 9 hours will his crop completely empty? If so, then you probably didn't do any permanent damage. If it will not empty in that amount of time, then you need a vet check. Sooner rather than later because bacteria or yeast can cause food to stop moving through the gut and they can go down hill super fast. Someone else mentioned Bragg's apple cider vinegar. That won't cure yeast, but it will make it hard for it to grow. If this were my chick, I'd not feed it for 8 or 10 hours. See if you can get the crop to go completely empty and flat against the chest. When you resume feeding tomorrow, feed about 10% of the body weight and use a few drops of apple cider vinegar in the water you use to mix the formula. The recommended amount is a teaspoon ACV per cup of water. Don't use the ACV forever, just a couple of days. If you are feeding 10% of the bird's body weight, he should be empty or nearly empty after about 4-6 hours depending on temperature and activity level. If the crop isn't emptying or very close to empty in that amount of time, again, you need a vet check. I think it even says that in the instructions on the Kaytee Exact formula bag. If you don't know what 10% of his body weight is, that is probably because you have not been weighing him with a digital scale. If you haven't, you need to go get a scale, then weigh him every morning on an EMPTY crop(a weight with food in the crop is nearly useless as you're weighing an unknown amount of food food instead of just bird). That is your baseline weight for the day and for most babies you should feed about 10% of that weight. People that have raised a lot of babies, can make a judgment based on feel of the crop. For everyone else that isn't super experienced, or just those of us that like a guideline, you need to weigh the chick. BTW, a scale must be a gram scale. Ounces are nearly useless. If the chick isn't empty tomorrow morning or very close to empty after not being fed over night, call around and see if you can get a saturday morning vet appointment somewhere.
Also, if you don't already know, you should feed the chick shortly before or after his crop empties completely. Cockatiel chicks cry and will convince you that they are forever starving. If food is in his crop, he probably isn't starving...unless you've over stretched the crop to the point that the muscles won't push food into the gut in which case you need a vet.
In your case, I'd give it a couple days and let that crop completely empty between feedings just to make sure you have his system back to running properly again. If everything seems to be going well, then start feed him when he isn't quite empty. This helps to ensure good growth, but the trick is that if you use that method, he should ALWAYS empty over night. So if it takes him 5 hours to almost empty his crop, go ahead and sleep for 6-8 hours at night so when you wake up, his crop is empty. If its not empty first thing in the morning, don't feed him. Wait another 1-3 hours for it to empty, then resume feeding. If its not empty after 8 hours and you know you aren't over feeding because you've been using the 10% method, then you need a vet.