My forest fire digi is doing great up high in the tank getting plenty of light. I don't think lighting is the issue with the tissue loss.
Lighting absolutely has a direct effect on tissue loss, especially in systems when there is insufficient nutrients. When there is zero nutrients, coral tissue thins significantly, which at high light will cause it to bleach, recede, and even die off. It appears that OP is having really low N and P so he needs to raise that, in the meantime, the strong light is torching the coral, which is why he'd need to lower the light intensity or lower the frag. Once he is able to establish more nutrients in the tank and have everything stabilized, he can then raise the coral and the light intensity.



