m - have you never heard of allelopathy? It serves not only to deter predators, but also to inhibit neighboring coral's growth and the strategy works very well even in the wild... I have witnessed sarcophyton, lobophyton and capnella have immediate and profound effects on corals in a tank. It works as a survival strategy for the corals in the wild. Put them in a box with recirculating water and the effect amplifies. Carbon and flow do help, but if the water is just recirculating around the same corals, animals that are sensitive to others in the same system will suffer.
LOL, I think you should re-read my post; I've certainly heard of allelopathy. There is no evidence, or logical reason to assume it happens as your suggesting in nature though. It would take a prohibitive amount of energy to produce toxins, in large enough quantities, that they could effect a neighboring corals through the water. Especially in an huge ocean with vast water movement and dispersion. If you're a coral, it is much more energetically efficient to wait and sting the coral with your nematocysts or just digest them when it is in close proximity. This does happen.
Also, what happens, is corals and especially their surface associated microbes, produce alleopathic chemicals to keep from being eaten, and to deter other organism from growing over them. I have read a lot on this subject, and other than one flawed, amateur study, by Eric Borneman, there is no evidence any of these are readily released into the water. I haven't heard a Marine Biologist suggest so in a few decades and the ones that did I don't hear from anymore. A few showed some coral associated chemicals could potentially be toxic, but never showed any further evidence of this mechanism being used. The evidence is that these chemicals are surface associated, meaning that they are contained in or around the corals mucus membrane. If the coral sheds it's mucus, or dies this may have an effect on other corals, especially in a closed system though.
Sacrophytons are a good example. They regularly shed mucus to eliminate surface fouling organisms and contaminants. Corals will also shed mucus when they need nutrients. It has been shown for example that some corals, when light deprived, will shed more organic carbon, in the form of mucus then corals under intense lighting. The idea is apparently that they need extra energy, so, they shed some of the energy source provided by their zoox, as this drives bacterial growth, which they can then consume to gain more energy. The organic carbon even could effect neighboring corals, in a closed system, as it can drive pathogenic bacteria as well. And certainly if a coral is dying, it will release all sorts of nasties.
So, I'm not saying that what you are suggesting can't happen, I am saying that will good flow and filtration it is unlikely to happen. Organic carbon and organic toxins should be removed readily by GAC and protein skimming. With good flow, they should not linger around other corals for significant amounts of time. The chemicals are not specific to corals, and often seem to be more anti-biotic in nature. So, the effect on corals seems to be limited to begin with. In a well filtered aquarium, it's been shown time and time again that corals can be kept in dense populations, in close proximity without significant ill effect.
In my experience, when people think this is happening, and look very hard, they usually find that there was something else. So, IMO, it is better to rule out predators, disease, stray voltage, contaminants etc.. before jumping to the "chemical warfare" conclusion. Unfortunately the term has become so common in the hobby, people seem to often overlook the actual disease, pathogen or predator responsible in favor of the buzz words "chemical warefare". I think occasionally another coral is to blame due to indirect alleopathy, but more often than not, there are other things going on. Anyways, it won't hurt to keep looking
