I upgraded an Flir B360 and saw similar behavior.
The visual camera was shown in full resolution and color. But in Picture in Picture and other "fusion" modes, the visual Image is cropped to fit with the thermal image. If you focus, the visual image is shifted to compensate for parallax issues.
Additionally, it was converted to grayscale, therefore each color like red or blue comes from the thermal image, not from an object in front of the camera.