Colors are also symbolic, from the black robes of the judiciary to the white robes worn by nuns.
Thus when sightings include reports of colored lights on ships, or even ships of various colors, they assume this to be in part a signaling process. It is not. Human society, being a 3rd Density society, cannot prevent interaction between individuals or groups, and thus signals and signs are valued for the assist they give to structure. Red light means stop, flashing light means impending action, neon light means the establishment is open, and direction can be indicated by following the moving arrow. Lights, and in particular colored lights, are a communication vehicle in human society.