Yes, that T1 master is bad, but it looks almost like it was transferred from a theatrical print, or a theatrical print master, or something. No American home video release has colors anything like it (and there's no Harlan Ellison credit, meaning this is from a source around the time of the original theatrical release, before Ellison sued and his name was added as part of the settlement).

Theatrical prints have much higher contrast than the elements used to make home video transfers, so they often look blown out like that if they are transferred. (See also: Bootlegs and screeners transferred from theatrically-timed sources.)

So it may be a poor transfer, but there may also be clues to the theatrical color timing. That's why I bought that disc.