The anemone looks healthy. Sounds like it is spawning. Females release eggs and males release sperm, which looks like a cloud of smoke. So you you seem to have a female.
Sometimes they will do this as a sign of stress FYI. Is the anemone new? How old is your tank? Can you think of any recent changes that might have triggered this?
Yes your right, I recently did a huge water change, rinsed all my rocks and added some sand too. That is probably why. I was afraid the anemone was dying but it's looking normal now.
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