I have a bit of a problem.

From the the pictures, the anemone is definitly distressed. For an example, the tentacle lenth and disappearnce of the verrucae/fading is not normal seen in an established mertensii.

What is the alk, CA, and Mg levels? Again, if it was my anemone, I would get some new test kids and double check just to be sure.

I have never found an anemone safe butterfly, particularly in a same tank with an already distressed anemone.

I am not sure of the lighting issue because mertensii mostly from deep water and I have never seen mertensii in less then 30 feet deep, even in extreme low tide. A chronic insufficient lighting will produced browning not fading of its coloration. Bleaching, fading of the oral disc/tentacles, and verrucase mostly, happens in an acute situation for this specie. Just my personal observation, good luck.
 
Okay..maybe thats why it doesn't look as good. You said you haven't seen a mertensii in less than 30ft of water..10k spectrum gives the appearance of being in 20 feet or less of water. It looked so nice under the 14k spectrum, once I switched to the 10k it started looking like this. 14k spectrum makes me feel like I'm looking at a tank in 30 or 60 feet of water. (ex SSI master scuba diver) Haven't been diving since I moved to texas. I miss diving :(
 
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