It very well could have been. I've not had any issues myself with palys and I had grandis in most of my tanks in the past. I would frag them in the tank no other corals ever seemed effected. Of course my tanks were not that small, which obviously could be a reason. I could razor blade them off rock with out damaging the polyp, then cut the mat in between polyps. So my technique was also less abrasive. It's possible it was a combo of the two things.
I am 99% sure it was because of the paly...
So today I did faster than planned sponge operation.
It grew visibly larger last two days and started to annoy paly, which started producing more toxin... On top of that paly seemed to start 'running away' from sponge part to the near rocks...
The patient two days ago was like, I had to use baster to force paly to close the polyps:
before surgery today it looked like - there was no much need of a baster to see it:
After the surgery:
This is extremely hardy beast

It will be fine tomorrow. I took it out, all gear on. Placed it in a small container and covered with tank water. Then I 'borrowed' from my Mrs some tools for crafts and methodically cleaned all the sponge off. Actually, there was a little smaller one on the other side too... What I took out was a a size of a tennis ball! Then I cleaned a lot of the paly's body, which had a lot of gunk, some unknown stuff of the slimy yellowish brown color (not directly on the coral, so this must have been there for a while because of the sponge.
I clipped few branches which were trying to go onto the rock, cleaned it using tank water, placed back into the tank and then bastered any fluid/gel coming out from it.
When I was finishing I had a bit of a hope coming to me. Feather worm, which lost the crown two hours ago and I thought will be a goner opened his tube and spat a huge gunk out of it, to me it was exactly the same gunk which was coming out of palys. Fingers crossed! Should get the crown back in about a week... Hopefully.
- Purple styro is gone. I am not even dreaming about having it back
- plating monti is getting back some color, it is not that pale as it was when disaster happened.
- digi green is getting better, but the skeleton is clearly visible, not sure if it will make it despite polyps popping more and more, low hopes but life will show.
- the other coral which I really forgot the name and which was the weakest from them all is quite OK! Surprise!
- Candy sucked itself in big time, I lost all progress from last two weeks, but nothing came out of it, it was even eating reefroids last night

In the morning I blew gently all the corals to ensure no gunk is on it and candy war 'fluffy', not just skeleton (4-5 ribs are visible, however mostly from the adventure it had with hermits and war coral)
So this is it for now. I am not that demolished like yesterday. It is my learning tank! It is better I experienced this first hand now than when the big tank would be full of corals! Surely it hurts to lose the pets, but... I should not after being in freshwater stuff for over two decades
and speaking of 90AIO project, I am going with Blade GROW 40W. Thanks
@ElementReefer ! After checking newer reviews I think I will go with 40W version! my tank would be more than good as it is 45 cm wide and 45cm deep, 78cm long (90-AIO). GROW should be good to start and then I can always add GLOW
Until the next time!