I have seen this fish on several occassions while diving in Palau. The first time was in 1997. They were exactly as Scott described, reclusive and hiding under overhangs and in small caves at depths from about 80-130 feet (deepest I went). What is interesting was that I dove at the same reef two years later. This was a year after the massive coral bleaching event that ocurred there, water temps at that depth were now in the low 80's, there was less coral (most had died) and less fish ... but the fatheads were still there but now, instead of hiding in crevices they were seen actually out in the open, swimming about a few feet from the bottom, much more commonly seen now then two years prior. My conclusion was that the lack of larger more active species of fish,. allowed them to become bolder and venture out into the water column. They did not form large schools like other anthias do, they formed more of a continuous loosely formed group.