This is EXACTLY why I won't buy a Scoly. The price alone is scary.. and to watch it wither away and die, is something I hope to never experience.
I have a plating fungia that suddenly is doing exactly what your scoly is doing. I expect that in a day or so I will have nothing left but a bare skeleton. :-(
One of the issues Ive had with these is direct contact with sand. As food falls to bottom, the fish will fan the sand for the food particle and the sand lands on scoly and Trachy and irritate them. I elevated them a tad and a difference maker. because theyre on the bottom, their available PAR is often low for production of zooxanthellae. I recommend Medium light and moderate flow. I feed mysis shrimp which they respond to well.
Assure po$ and No3 not elevated, water temp in range as well as salinity.
What fish are in the tank that may be nipping ?
Wide variety of issues, a lot depends on the circumstance. The most likely culprits are water quality, light or flow. It may like higher light, but a sudden par shift on it could also be the final touch it needs to melt. How long has it been in your system?