Looked like an after-burning effect to me

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm

seemed like smoke or soot ? particularly a little later as it separated from the rocket.

now the first stage is getting close to empty and shut down and over 200km high ... less optimum combustion ?

another day in paradise, or is paradise one day closer ?

Actually, the first stage was intentionally shut down and jettisoned for recovery, as shown later in their video, so it still has sufficient fuel to decelerate the first stage and power into a landing on the recovery ship.

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm

of course not "close to empty" ... such olde school thinking ! still close to the limits of it's operation, so maybe less complete combustion ?

another day in paradise, or is paradise one day closer ?

It's unclear, the plume separation occurs a full minute before MECO https://www.youtube.com/watch?v=n1KwjJhm9A0 and about 30 seconds after going supersonic, so perhaps some sort of Mach diamond?

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm

My thought
Well mixed stoichiometric RP1 and oxygen will burn nearly blue but that is only the case inside the combustion chamber.
Fuel rich RP1 and oxygen burns with soot and color.

The orange flames are the burning of the excess fuel from the gas generator portion of the engine.
The gas generator exhaust is vented on the outer side of the nozzles on the 8 perimeter engines.
When the excess fuel hits the oxygen in the air and the main plume (reheating it) it burns producing the orange flame as shown in the 8 outer flares close to the rocket. But the gas generator on the center engine is not exposed to the air yet.
As the 9 plumes merge and mix farther down some air get mixed in and the excess fuel from the
center engine creating the main flare in the center but it is spread out due the extra mixing.

The flares are not as pronounced at lower elevations because the main plume has not spread out to provide the relighting of the gas generator plume, it just stays a trail of black soot and disperses.

Hydrae

Rockets typically throttle-down the engines before going super-sonic and then throttle back up afterwards. Add that to decreasing air density with altitude and much higher acceleration due to lower mass (fuel has been burned) and it's likely a number of aerodynamic effects are in play. Additionally engines running a sea level up to mid-altitudes have a shorter length rocket nozzle/bell, so the expansion behind the nozzle will be less optimal as it approaches higher altitude where pressures are less. The second and third stage rocket engine bell are longer to operate more efficiently at the lower air pressure or in the vacuum of space.