I remember occasionally Layers would confuse the colors in Layers... collapsing-expanding them all used to solve this for me (with Opt/Alt clicking) on the arrow before a layer’s name.
However, I don'’ recall the exact conditions to make it happen. Does anyone?
I remembering it can relate to expanding symbols... but your example looks like it was not using these. Rebuilding the structure form scratch and trying to break it failed for me.

I see, thanks for the quick reply. Haven’t been messing with sublayers either, so I assume it’s around for a while now?

Good to know, thx for clearification.
Yeah regarding the gif, it doesn’t seem to be minor.. :/

Ah, now I see what you mean. Yes, it is known to me :( That’s one of reasons I avoid using sublayers at all.
It’s even stranger than you demonstrate — take a look at the GIF attached.
So it’s not really minor...

The attached video shows how the bug is reproduced.
It is not urgent, since it does not have much disadvantages, but it may produce problems w/ further development/updates.

It was tested on 2 windows devices (Surface running Win 11, latest Illustrator CC version; Windows PC , latest Illustrator CC version) with new and existing files. I was able to reproduce it every time.

Thanks for ur time.

Compound-Layer isn’t green, I just marked it using snipping tool. It’s Blue, like the Parent-Layer.

Sure, had been reproduceable for me on any file so far, that’s why I didn’t provide further info.

I’ll get back to you in a few hrs.

Hard to grasp, sorry. Starting with a question 'why is the compound path green in the first place?'
Can you please share a test file with direct steps? A small video of you performing these steps can also help to reproduce this behavior.

When moving an artwork onto another layer the indicator-color changes as expected. If the new layer however is nested in another layer, and the artwork is moved from the nested layer onto the parent layer, the indicator color remains the nested layers color.
This can be fixed, by closing and opening the childview of the parent layer.
Also this does not apply, if the artwork is moved directly onto the layer and not between existing artworks on that layer.

01 - Artwork is moved onto a new layer
02 - New layer is nested in an parent layer
03 - artwork is moved from the nested layer onto its parent, but between existing artworks
04- New layer is deleted, but indicator-color remains

I think the Layers colors are wrong. In the following snipped, the purple ellipse and blue rectangle are assigned the color green in the UI but they really belong to the red layer.

Good luck with getting Adobe to listen and actually fix this. This bug has been there for years and years and Adobe have been aware of it for years and years but as with most things, Adobe simply doesn't care about fixing bugs any more.