Definitely this new transfer looks much better than the 2011 BD. Finnaly some decent colors!
(Check the BD, these colors are missing/muted.)
Well the colours in the marked areas are distorted mainly because of the lower resolution of the upper video. It is not due to any technical improvement. They downgraded the scans to fit LD capacity for 1997 release.
Perhaps this would indicate they are working with the scans done for the purpose of 1997 SE.