I know here in Canada for decades margarine had to be smuggled into the country, when it was legal it couldn't be yellow like butter (but even butter has artificial yellow colour added), it certainly couldn't be called butter.
Sounds like anticompetitive political corruption by the dairy industry; I can't imagine how that protects consumers.
Do you also have a problem with ground peanut spread being called "peanut butter"?
As for PB I'm not a dairy farmer.
The reason for laws restricting colour additions to margarine was explicitly because it is sufficiently close to butter in taste, texture and usage that it created a substantial competitive pressure on butter sales because people would happily pick margarine over butter to save money. So much so that the separate coloring failed to stem the growing demand.
I guess it's all about the color, see milk glass.