he looks fine... mine somehow maneuvered his body underneath a rock and into the sand but attached to the rock but sand covers his body and tentacles come out beneath rock and out of the sand
Your condy looks fine, I had one that when I got it was the size of a quarter, loved to move in out of my live rock but sometimes I think it was running away from my clown fish that loved to feed it but was pretty aggressive. Well in no time it got huge and to big for my tank and had to re-home it, I ended up naming it the beast I don't think you said how long you've had it but right now I wouldn't be worried.
I had it for about a month now he's pretty big when expanded he looks super healthy when he's out he been in that spot since the first day I put him in seems to like it a lot and for my lighting I have a fluval sea 25000k 46 watts which works pretty good wish I woulda did more research on lighting. For more color spectrum I kinda regret but works good for now