Color can definitely aid in understanding when it’s used with consistency. When it’s inconsistent, it becomes an impediment to understanding. The terminal is a place where you have lots of different small tools that you are using in conjunction. Even if each author uses color with consistency in their tool, the full collection of tools will be inconsistent with one another.
A hypothetical example: imagine syntax highlighting where strings are green, function names are blue, and comments are gray when you’re inside a function definition… but strings are green, function names are red, and comments are gray when you’re inside a lambda/closure/anonymous function definition… but strings are gray, function names are red, and comments are a syntax error when you’re in a string interpolation expression. In the terminal, each of those different contexts is likely to be a different tool. The author of the lambda highlighter arguably made a non-standard choice but they close PRs about this issue with “wontfix” because it invites too much bikeshedding. The author of the “string interpolation” tool wanted their tool to differentiate between the template/parent string and a string that happens to be part of the expression being interpolated. The string interpolation tool’s author has a good reason for their choice and their tool is very consistent about it, it even has a black magick regex incantation that gets arbitrarily nested cases correct. Each author has a good point and they’re all internally consistent, but when you are plugging them all together into a general purpose highlighter it still ends up inconsistent for you.
Or a real-world example: at the machining workshop, we have a painting cabinet filled with spray cans and paint tins of different bases. We don’t paint our products - that cabinet exists because whenever a new set of tools is brought to the shop, we paint all the flathead screwdriver handles yellow, all the Phillips-head screwdriver handles red, the Allen keys get a red band if they’re Imperial, a blue band if they’re metric, the wrenches likewise get red for Imperial, blue for metric, and so on. The standardized colors make it much easier to grab the right tool quickly, but we can’t rely on tool manufacturers to all globally standardize on colors since some of them have other constraints that we don’t care about (if they manufacture insulated screwdrivers for electricians as well, they will often reserve both yellow and red because “yellow and red two-tone” is the color scheme for insulated screwdrivers, so their non-insulated screwdrivers will be green for flathead, blue for Phillips - or purple for flathead, green for Phillips - etc). The terminal is an even more extreme example since it’s rare to get a whole set of terminal utilities from the same author, so all your number 2 Phillips would be from a different manufacturer than your number 1 Phillips. Also the terminal is sort of like a workshop where all the tools, even the screwdrivers, can be machine-mounted so maybe you want no paint on the handles because otherwise it rubs off on the chuck and the build-up messes up your tolerances over time, or something.