I'd say very bad condition. Just from that pic I'd say he'd be dying soon, I certainly wouldn't have bought him or anything from the same tank. Surprised they sold him in that bad of condition.
Depends, used to be wavemakers were either devices that switched powerheads/pumps off and on to create a varying current like:
Or a mechanical device that alternated flow between two outlets or rotated like:
But seems in the last couple years "wavemaker" has been used for high volume, low pressure powerheads that create a constant current rather than actual waves. Like the one in your pic.
That's because fish aren't livestock to be treated when they become ill. They're disposable decorations that don't go anywhere beyond $5 feeder goldfish kept in a bowl in a kid's bedroom. Which are then flushed and replaced every month or two when they die.
They're everywhere. Unlikely to "Spread" it to the other tank because they're probably already present. It's a matter of the water conditions being appropriate for it to overrun everything or not.
Probably not the cyano, likely the cyano and the deaths are symptoms of poor water quality.
It does look very much like a hybrid of an electric yellow and something else from the muddy coloring. I'd put my money on the guy flipping through pics and deciding, "Hey, this looks close, must be it!" when he just has some garbage mutts.