The binary alloy Mn0.5+xBi0.5-x, x ⩽ 0.05, is a promising rare-earth-free magnetic material, with high-energy-density (a critical characteristic for electric motors and power electronics), low cost, and significant magnetic properties for multiple uses at room temperature. In this article, we report how a free Bi, when precipitated over Mn0.5+xBi0.5-x (x ⩽ 0.05) of small crystallites, diffuses back into a stable Mn0.5+xBi0.5-x, x → 0, via a peritectic reaction, which facilitates preferential growth of small core-shell crystallites with multiple facets, having the potential for tailored magnetic properties. This growth travels slowly in the anisotropic channels of vacancies on annealing the reactive nanopowder at a critical 573 K temperature in Ar gas. Thus, an initial crystallite size of D ∼ 27 nm grows to only 38 nm in a reaction extended over a period of 96 h. A transient phase, x > 0, which has Bi vacancies, primarily grows in the (101) and (110) facets, filling the vacancies over a 6.41% larger crystal density. If any excess Mn is present, it segregates over a saturated phase, combines with free Bi, and ultimately forms a stable alloy phase. The small crystallites contain an inbuilt surface Bi-layer (shell), with a 1-2 nm thickness, in a core-shell of nanoplates (20-60 nm width), as shown in the high resolution transmission electron microscope images. In the proposed microscopic model, with hybridized Mn-d5 and Bi-p3 electrons (also spins), the magnetic properties are readily controlled. Thus, at 300 K, a maximum coercivity Hc = 9.850 kOe (14.435 kOe at 350 K) develops (Hc = 5.010 kOe in the initial) in critical single domains (D ∼ 33 nm). A net 72.5 emu g-1 magnetization occurs, with an enhanced TC = 641.5 K (600.5 K at x ∼ 0.05) on an order of enhanced anisotropy constant K1, demonstrating the significant effects of this core-shell structure of small crystallites.