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When material does not have loss and the guide mode is confined, the simulated loss is from the PML. This is why when I sweep the simulation spans, the loss continues to decrease. PML is part of the mode calculation. You do not need to use very fine mesh in FDE. you can use finer mesh for the waveguide core. and use fixed mesh sizes but use larger simulation area to let the PML be away from guided modes. You can use log scale to check the mode profile and see how much the intensity is at the edge of the simulation region.
I used 16x16 area with 0.02um, and got this:
If you want to get accurate result at the final stage, you can use larger area and relatively small mesh size.Â