Version: 1.21.1
Mod Version: v1.4.0
Fabric Version: 0.16.8

Description: Dropped item rarity glow does not change under some circumstances when they have a custom color in the name
The items have color through a renaming mod, it adds the color via components. If you need more info due to inability to diagnose I can get an NBT editor mod to see exactly how color is applied.
Clip: https://medal.tv/games/minecraft/clips/j2YOUBnb63nxvzeDW?invite=cr-MSxnYjcsMTA1ODAwNzcs

Thanks for all the details. I think probably the main thing I need now is the mod name

https://modrinth.com/mod/faewulf-itemrename

Item Rename mod but I also used https://www.gamergeeks.net/apps/minecraft/give-command-generator to generate a normal item with color applied and it also didnt glow blue.

I've learned that there are 2 item name components (which I didn't know before). I was only supporting one of them and that mod and the command generator were using the other component, but I have mostly fixed the issue now