I'm positive that the benefits of the Magic Fish only apply to a tank that they're swimming in. I've tested that, and the FT instructions say, "The Magic Fish have beneficial properties that affect the other fish ....but only if they are alive and swimming in the tank." That's a good thing, actually, because you might not want some of those effects to happen all the time.

Are you sure that you have Magic Fish #7? That fish can't be obtained from eggs (although two different Magic Fish can be), and it definitely won't survive for a long time at Level 2 without pumping vitamins into the tank.