Yes on further investigation, it seems that NIV11 and NIV11UK are the only ones that override usfm.sty for the \Color of \wj. Other resources like ESV, NLT use the markup but don’t override usfm.sty so I have been able to change usfm.sty on my machine and I will advise my annoyed consultant friend to do likewise. Of course that may need to be redone every time Paratext updates and wipes out usfm.sty, but that’s OK.
So if you could update the NIV custom style sheet to not touch Color (or anything else) for \wj that would be great. I presume the custom stylesheet just overrides parts of usfm.sty but I obviously can’t look at it myself since it’s wrapped up in the password-protected p8z zip file.
Perhaps rather than a tick box for red letter, a more sustainable feature in Paratext would be some way of providing a supplementary .sty file that can override anything provided in the resource zip. It’s possible there may be other things that we need to change too.