Ok, let's guess who's on the dinner menu now.

I personally think he's just picking off the dead tissue. It looks like you have a issue of STN. How long have the tank been setup?? You said your having nitrate issue. What are your other parameters? I wouldn't blame the shrimp just yet.
 
KH=9, PH=8.3, NO2=0, PO4=0.03, NO3=2.5~5. Temperature is around 75-77
That particular SPS was ok. I put it in a place the shrimp can't reach, and I didn't see any more damage spreading. that kinda confirmed the shrimp wasn't there cleaning the dead tissue...

I couldn't take another pic yesterday, they were all hiding. I will try to take one when I can.
 
KH=9, PH=8.3, NO2=0, PO4=0.03, NO3=2.5~5. Temperature is around 75-77
That particular SPS was ok. I put it in a place the shrimp can't reach, and I didn't see any more damage spreading. that kinda confirmed the shrimp wasn't there cleaning the dead tissue...

I couldn't take another pic yesterday, they were all hiding. I will try to take one when I can.

That really doesn't confirm it....Pocilliopora that I had once before had a tendency of losing it's polyps on the lower end where it gets very little to no light. From the picture I can see the bottom part of it is losing the polyps. I went through quite a few Peppermint shrimp and never had one that attacks SPS. All my previous Peppermints either died from moving or eaten by Coralbanded Shrimp. I have one right now and he does not bother my SPS. He's on it to clean it that's about it. I had this one for about a year now. Haven't lost any SPS yet. If you really have doubt about him eating your SPS, I'll be glad to put him with my Peppermint who's name is Peppy to give him a friend. I'm a big fan of Peppermint Shrimp, mine eats off my hand. He knows when it's feeding time.
 
Pepermint Shrimps

Pepermint Shrimps

I like shrimps in my tank and many years ago bought seven or eight peppermint shrimps for my 180G. Well, because I was not feeding them well enough within a few nights ate half of a meat coral. I even had one out of two cleaner shrimp picking on my clam. I now have one and I make sure is feed well. Anyway, I think any shrimp not well feed will be resourceful.
 
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