[Mobhack]

In addition to what Don says - Colour images are only used in link screens in the game, where the colour cycling is not running (for smoke and fire effects).

The black and white palette used does not use any of the reserved cycling colours - but colour conversions (or B/W ones that do not use the correct palette!) may. Therefore if displayed in the running game screens, the colour pictures will sometimes "swim" or "sparkle" with the smoke cycle as the game colour shifts some of these pixels as it thinks it's a smoke or water or fire effect.

Mainly that will likely be in the "information" pop-up box for enemy targets, though there may be other screens that show this. (Its been since way back in the MSDOS days since I last looked at that stuff.)