The rarity color outline does not work for most items. This might be squish/item level related.

Additionally, when moving an item that the rarity border color does work on, the border color will remain even if the slot is empty.

If you put a different piece of gear in it's place (no matter the rarity), the color will remain.

Cannot replicate. Make sure you have Lua Errors enabled and that you have not installed the addon while the game was running

I see, Tuller uploaded a broken version 5 days ago. Now it makes sense.