Since the dyes will only penetrate freshly-shredded wood, coating composted bark with the decorative pigment is not an option. Gardeners know what freshly-ground wood chips do to their plants. They steal nitrogen from the soil, depriving roots of this most important nutrient. Plants literally starve to death. The process through which this occurs is fairly complex and involved the relative amounts of carbon and nitrogen present in each product.
Dyed wood is mostly carbon.
As a host of micro-organisms in the soil goes to work digesting it, they suck almost all available nitrogen from the top 2 to 3 inches of soil. There's where the majority of new feeder roots grow. Proponents of dyed mulches suggest adding extra nitrogen fertilizer to supply what the plants need. Experts argue it would take huge amounts to counteract the effects of the mulch. Also, since nitrogen is volatile and moves quickly through the soil, fertilizer would have to been applied liberally and frequently to overcome nitrogen deficiency during the life of the mulch.