This is a bug in the current version of the Bootleg Configurator. Reinstall without mode switching fixed it for me. Just choose the original game mode. By the way, I beat that boss and it was hard as hell. After beating him I looked up the fight on Youtube thinking that I was a noob. It was a boss from the hardcore mode that somehow gets mixed in.
Be sure to do a clean install. Back up your save file. Uninstall FF7Music and FF7 from the Control Panel in that order. Reinstall FF7 and afterwards redo the bootleg configurator.
I reinstalled everything but now when I get into a battle the Limit and Wait bar are positioned over the character's name and the HP and MP numbers are in the wrong position. I've tried 2 fresh installs and I still get the same thing.