A little confused ... can you list out each of your drives and their status (CTRL-M, Configure, View/Add (disk view, if prompted))? Not sure exactly what you are seeing. Also, setting a drive as a HS should not change the status of another drive from failed to online. Online should first require a rebuild ... if it were actually failed.
Sorry, will look at it again tomorrow. Maybe what I saw when I first looked went into the ctrl-m bios application was 0,1,2, Online, 3 "Ready", 4 Online, 5 Failed, 6 and 7 Online. We then selected 3, and set it to Hot Spare. We rebooted the server and noticed that Drive 3 was now blinking a fail and drive 5 was green. Went into ctrl-m bios again and now drive 3 is Failed and drive 5 is Ready.
How's your server? Is everything ok now?
Do update us please.
From ctrl + m, have you check from View from NVRAM and View from Disk? Are both set of configuration the same?
Are you still seeing this:-
Let us know please.