Lacy-looked plant is incorrect even if it were dead plant that once looked lacy.
Student or Learner
Many Korean students make a mistake of choosing 2 and this kind of form is always appear in Korean mid-to-high school English exams.
I don't know if it's desirable, but anyway it causes a lot of confusion to students. I explain to them that when an intransitive verb like "look" is used as a past participle "looked", it means "completion", whose meaning wouldn't make sense like "the plant ceased to look lacy, but it used to look lacy". I can be confident in my explanation, but I need teachers' opinions.
What do you think this means?
As Mike said, it's incorrect so it means nothing. It's not just incorrect in your context, it's simply incorrect English.
Remember - if you don't use correct capitalisation, punctuation and spacing, anything you write will be incorrect.