Let's start with the recipe this time:
3 cups mashed bananas
1/4 cup lemon juice
1/4 cup minced maroschino cherries
6 1/2 cups sugar
1 bottle liquid pectin
Put sugar, lemon juice, cherries and bananas in a pan. Bring to rolling boil and boil hard 1 minute, stirring constantly. Remove from heat. Stir in pectin. Mix well. Put in jars. Boiling-water-bath 10 minutes (pints).
So I made it right today with the liquid pectin and it didn't separate this time. So the moral of this story is: never use powdered pectin when making banana butter.