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Mermaids who have not made it into the water after a few days do revert back to humans. Since you can't keep an eye on resident mermaids and guide their activities all the time, the way to prevent this is once they already have the occult status, use MC to grant them each 5,000 (I think it's that low) LTR points and then Purchase Rewards to give them the Permanent Mermaid LTR.