Looks to me like, no, it's not easily fixable. That is, there isn't enough space in the Sylph routine itself to rewrite the code so that it works properly.
That being said, it would be very easy to write a new routine that handles the MP reduction properly for both spells, but it would have to occupy a new space. Are you sure these are the only two spells that use this subroutine for MP reduction, Grimoire? I mean, that doesn't really matter, I guess, except that if they were, and I wrote a new routine in a new place that doesn't use them, then I would blank out the space they occupy once the new routine is created.
By the way, regarding processor status (since you put those question marks in there): the SNES CPU has eight processor status flags that can either be turned off (reset) or on (set) with these instructions, and the parameter identifies which flag(s) is (are) being affected by bit identification (01, 02, 04, 08, 10, 20, 40, 80). Flags 4 and 5 (10 and 20) are the only ones I've ever seen FFIV use (and flag 4 is rare), and they affect the 16-bit status of the x/y registers and the accumulator (A) respectively.
So, SEP #$20 makes the Accumulator 8 bits, and REP #$20 makes it 16 bits (SEP #$10 and REP #$10 do the same for x and y).
I just realized that you may have disassembled that a long time ago, so... sorry if you knew that already.