It's mermaid repellant.
Mermaids (and all mer-kind) are a widely varied bunch, especially in their relationships with humans. Some avoid humans. Some eat humans. Some are friendly to humans. Some marry humans.
The sect's navy got tired of sailors being killed accidently while being pulled deeper and deeper into the sea for each kiss from playful mermaids. No matter what precautions were taken, sooner or later more sailors ended up drowning.
Some in the navy proposed war, but merkind are fearsome opponents and the navy had enough other enemies to deal with.
Then the solution was found. Yet another member of the sect slipped off an anchored ship to cavort with a mermaid. He was a few kisses away from being dragged too deep when the mermaid let go and quickly swam away. As he swam back towards his ship, she surfaced near him. Still being too distracted to realize how closely he had avoided death, he asked why she'd let go.
"Didn't you see it?"
”See what? A shark? A whale?”
A small, very bright green fish swam by. She screamed and covered her eyes. "It's horrible! Make it go away!"
"It's just a liitle fish. Is it poisonous?” he asked.
"No, it's the color. There's something wrong about that color. I can't bear to look at it. None of us can. I'll be ever so grateful if you chase it away.”
Word of this encounter reached the ship's captain. After a few weeks of searching, a fish like the sailor had seen was captured. Just a quick glance at it sent mer people fleeing. More fish were captured, but keeping fish between the sect's sailors and dangerously playful mermaids wasn't easy.
One day, after a few too many rounds of rum, someone suggested making a hair dye of the exact same shade. It worked, but only lasted for a few days before fading. Something more permanent was needed. Eyes were included to protect bald members of the sect.