Thanks for all the tips.

I masked off the decal again today, slightly offset, and attempted to abrade the offset area and decal edge ready to re-coat. This time I intended to remove the masking after applying the last coat. To protect the decal while I sanded, I put a post-it sticky note over the decal to leave a channel round the edge (between the sticky and masking) that I could rough up.

But It is turning into an unmitigated disaster!

I used 800 grit wet and dry. Any abrasion causes the clear coat to lift and crack off, rather than being rubbed down. At least the sheen is reduced on the powder coat so hopefully the new coat will stick better. Then, when I removed the sticky note, a chunk of the decal peeled away with it. The glue on sticky notes isn't even strong, which is why I used it. I give up! So not only has the clear coat not stuck, but the fragile decals haven't stuck either. It also shows the clear coat is doing very little to protect them.

I wondered whether I should have roughed up the powder coat even before I applied the decals? I decided not to after reading a post which said a smooth glassy surface is optimal as it prevents air getting underneath and silvering, which made sense.

My advice to anyone reading this and thinking about putting waterslide decals on powdercoat is don't bother. Use vinyl. They may not be as authentic or whatever but they're going to be more durable for sure.