Java moss works like so many other plants and does remove impurities from the water by making them become part of the plant. As long as the plant does not die, those impurities will stay locked into the structure of the plant. It is one reason we always remove any dead or dying leaves, to prevent releasing the impurities back into the water.
Terra cotta does not usually affect the pH or hardness or any other parameter of the water that I have noted. The one thing you may want to do if you have smaller fish is to make sure the pots do not have sharp edges. Try rubbing them with a nylon stocking and where the stocking grabs take a small piece of sandpaper and rub the roughness off. Fish can be torn or fins broken with catching on these rough areas. Be sure to check the drainage hole in the bottom as well. If you have a betta plug the hole in the bottom as I know of many bettas who have gotten half way through the hole and gotten stuck. They are terminally curious and think they have to go through everything. If they get wedged tight they cannot go to the surface to breathe and will drown.
thanks for the info. this will be the first time with java moss. I did not know that the dead leaves would release toxins, I just thought we trimmed for new growth.... no bettas in this tank, but I was planning on breaking out the one side and so that the pots would rest securely on the bottom, I guess I will break some of the back out as well. I have a ton of sand paper so no one gets cut.
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