Think I found the cause and the solution. I was manually starting the game by clicking ff7_bc.exe since I was using The Reuinion Mod without the Sepiroth Story mod. For some reason everything was misaligned. Then I went back and renamed the ff7_bc.exe to ff7.exe made a backup of the original ff7.exe and used the 7th heaven lauch button now everything works.
The .EXE doesn't have to only be named ff7.exe...any name will work, so long as the original name of the .EXE launched the game ok.
The problem was when you were launching ff7_bc.exe manually outside of 7H, rather than setting it's path in Workshop -> Settings -> FF7 Exe and clicking the "Launch Game" button inside 7H. Clicking that button is clearly stated in the Written Tutorial as the last thing to be done to play the game. Mistakes happen, it's ok. This process has a large learning curve, but is a breeze once everything is setup.
Please read the last quote of this post.
Update on my problems: For the time being I found a temporary fix for anyone who is having this problem. I used I old version of the menu overhaul from the last catalog, and installed it along side of the new version. I put the new version higher in the load order than the old one and set the new to use because (one of the main reasons I wanted the new update because of the better spell names) and the old one using just the menu overhaul (i don't think that adding anything else should stop it from working I just haven't tested it out). I think the reason this works might have to do with the load order. Anyway this should hold you over until this problem is fixed.
This is not a fix, it's just a workaround. After you activate The Reunion - Beacause and click the OK button to exit out the Configure Mod window, you should see messages for compatibility. At that point everything that may cause conflicts has been disabled and grayed out. Can't provide you any support if you're going to continue to use mods from the old Catalog. That MO was from The Reunion R02x, which had some misalignment issues with the windows that are now fixed with The Reunion R03e being used in Catalog 2.0.
Please read the last quote of this post.
I don't have ff7_bc.exe in my FFVII directory. Do I need to download it separately or should the tool be providing it?
What needs to be done for everyone is to change your Workshop -> Settings -> FF7 Exe to launch with ff7_bc.exe. This will load up Beacause edits in the .EXE, but it will work with MO. I forgot add into the new Game Converter the updated ff7.exe that is produced from installing Reunion R03e with everything unchecked. It's my fault, I will patch it this weekend and report here when it's uploaded.