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to explain the issue simply, due to palette restrictions in the microgame editor. the colors tended to be inaccurate to the original games in varying degrees.
the video uploader (who is someone who still actively makes content for the game to this day, half of the video is devoted to the fixes being applied to their own microgames.) used Dolphin's custom texture feature to replace the sprites with more accurate ones, even adding missing details in some cases.
it's not perfect owing to other restrictions with the editor (note how the sprites in the Punch-Out microgame are heavily squished.) but it's still nice to see the work being done.