Do the colors appear in safe/troubleshoot mode (hold Option when launching TB)? Are the colors applied to tagged messages? The attached picture shows the menu on W10/91.2.

I tried your suggestion but it still doesn't display colored tags. I don't use any add-ons but it was worth a try. The colors stopped appearing the same time notification banners stopped showing up for new emails.

A bug was reported here: https://bugzilla.mozilla.org/show_bug.cgi?id=1711813

As for notifications, I understand they are partly controlled in OS X System Preferences, so you might have to reset that.

Thanks but I've been using the correct system prefs for quite a while. Perhaps I can find an earlier release of Thunderbird to try. I'll have to go through my backups....