I believe red and yellow just mean the 'reading level' expected. When writing for a very broad audience, or writing things that need to be short and easy to read like e-mails, you want to aim for 'lower' reading levels.
I pasted some excerpts from a paper I was reading and it gave the 'Post-Graduate' reading level.
Does not mean it's bad writing, just hard to read (it's probably inevitable at that level).
It's probably a great tool for daily work, some people at my workplace used Grammarly, but it's paid, so this could be a good alternative.