Thank you. Goes to show that even technical people can misunderstand how tech works and assumes the worst. We definitely live in a post-Snowden world.
The conclusion should be that it's poor UI/UX design. If it has nothing to say about a file, because it's not under it's management, then it shouldn't have added any visual indicator green or blue.
That's exactly how it works. For files which are not part of the Dropbox folder it adds no visual indicator.
Have you even used Dropbox before? Or TortoiseGit? Doesn't sound like it.