Was the cast of wither red?
Nope. In all scenarios, both characters were blue as blue can be. The necro mage was in a guild and the other characters were unguilded and have never belonged to the thieves guild (neither victim had any stealing skill of any sort). And with the victim character that tried out reaper form and then chicken form, I made sure that her bar went back to blue (as far as the necro mage was concerned) after using wither on her while exposed in reaper form and before trying out wither on her in chicken form.
Throwing conflag pots at a blue character visible in reaper form is interesting. Neco character pulled the spellweaver character's bar before she went into reaper form. Then I put the spellweaver in reaper form and as far as the necro char was concerned, the spellweaver's bar was STILL blue. However, as soon as the necro threw a conflag pot at the spellweaver in reaper form, bar went gray and she got the message about attacking the other character. Same story for chicken form. Blue bars all around until the conflag pot was thrown at the character that was in a form. As soon as the spellweaver is back in human form and flags have worn off (i.e., necro and spellweaver are blue to each other), throwing pots at each other does nothing. Something else that is worth noting is that throughout all this experimenting, the bar for the spellweaver's horse stays blue to the necro mage.
Now for something truly bizarre. I pull out the character with ninjitsu and shuttle her off to the house in Fel. She jumps off her horse and I use the necro to pull the bar of the ninjtsu char and her pet before any shape shifting occurs. Both bars are blue. Now I throw a greater explosion pot at the ninjitsu character and nothing happens. Fine and dandy.
Weirdness ensues, however, when the ninjitsu character morphs into a serpent. Necro throws a greater explosion pot at her and does major damage because the ninjitsu character is only wearing a robe. Necro character sees the message about attacking the ninjitsu character--HOWEVER the ninjitsu character's bar and her pet's bar STAY BLUE for the necro mage. The bar of the necro character that the ninjitsu character pulled goes gray and she of course sees a message that she is being attacked.
I tried that experiment a second time and finally did get the victim's bar to go gray for the attacker by going off screen and hiding the victim and then coming back and becoming visible. Repeating the experiment again after all bars were blue again did the same thing and the victim's bar once again didn't go gray for the attacker until the victim was hidden and reappeared. There seems to be a delay or bug in refreshing the client in that situation. The bar of the victim flagged to the aggressor is staying blue while the actual character of the victim becomes "brilliant blue" for lack of a better phrase, so flagging is happening....sort of. (All this was done in the legacy client.)