This effect is expected if somewhat unfortunate.
There are 3 main quantities that Krakatoa uses, and 1 derived one. They are Color, Emission, Absorption and Extinction respectively. Emission is straightforward, and Color is usually easy to understand but Absorption is handled kind of unfortunately. Extinction can be thought of as the inverted shadow color (ie. what is subtracted from light as it passes through the particles). When “Use Absorption” is disabled the Extinction value is considered to be white (ie. [1,1,1]) no matter what the Color value is. When “Use Absorption” is on, the Extinction values is the sum of Color and Absorption. When particles have not been assigned an Absorption value (via the .prt file or from the global override, for example) the Extinction will be equal to the Color meaning that light passing through particles will remove the same color/amount of light as is reflected back towards the camera. The end effect in that situation is that the bulk of your particles will render bizarrely since the dominant color frequency will be quickly removed from a light ray and the interior particles will reflect the less dominant color frequencies. In your case when “Use Absorption” is on you are seeing a very thin band of the expect color at the very edges and the bulk of your particles are reflecting the modified light.
In summary: Absorption is a weird quantity and I wish we directly specified Extinction.
That being said, you will want to set the Absorption value per-particle (probably with the global override) if you have “Use Absorption” enabled.