If your terminal supports it (xterm and lxterminal definitely work), sdm changes the terminal colors when providing a command prompt in Phase 1, or when using the --mount command, to remind you that things are not quite "normal".
The colors used by --explore are controlled by the --ecolors command switch, which takes an argument specified as 3 colors. The default is --ecolors blue:gray:red which sets the foreground (text) blue, the background gray, and the cursor red.
The colors for the --mount command are controlled by the --mcolors switch; the default is --mcolors black:LightSalmon1:blue.
If your terminal emulator doesn't do a good job of setting and/or restoring the terminal colors as described above (for example konsole seems to have a problem restoring the terminal colors), you can use the --ecolors 0 and --mcolors 0 switches to disable sdm's terminal coloring.