Red letters that emerge in highlighted paragraphs with custom highlights seem to be a glitch. Both the dark and light modes are accurate. The built-in highlighting palettes continue to function as intended. Do I have this right or is there a bug here? The settings are what determine text preferences. I did some more digging. Here is how to replicate:
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Use a "natural highlighter" to draw attention to a piece using "red letters." Red text is still present.
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Make a copy of the "natural highlighter" palette. The highlighter from this palette works as intended.
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Simply switch the background color of the highlighting technique in this palette. "Red letters" are no longer kept red by highlighters.