Nitrates within 40 ppm shouldn't cause such problems. Could be reaction on stress - changes in temperature, salinity, toxins of the some animals in tank, ammonia. At least, mine reacted on this, but not on nitrates. Could be some infection.
Sorry, can't help with the center eroding, but have some thoughts on what you may try, if you want:
I had similar, but different corals, all were bought damaged, but restored in a few months. The care is the same for all:
Here is the worst one:
This is more like yours:
Mouth structure of the first, when it not in the best shape, looks scary:
May be erosion of yours is reversible.
What I did:
Placed then in a relatively low flow, good light (sunlight, southern window in Canada), fed (or at least offered the food). It could be in the main tank, or in a hospital container:
They don't like the rapid changes in salinity and alkalinity - shrink, but later restore their appearance.
When restored, looked like this:
The brains (except Trachyphillia) are quite hardy, IMHE. Just give them a good peaceful place to restore their health. Worked for me with scolymia, cynarina, symphyllia, lobophillia, moon brain.
Just a thought.
