Ok so I believe I've gathered together some evidence that supports Domani got shifted to all red notes because of the use of 12th notes around where the red note syndrome starts happening. In other words, the red note syndrome was not intentional/not a BPM change.
A
post from Shashakiro mentioned how the red note syndrome in Exciting Hyper Highspeed Star was a bug in the converter, and later this was revealed to be the 24ths.
At the time the converter only supported red, blue, and yellow (4th, 8th, and 16th respectively). A
post from plasmix in 2004 suggests that for 12ths and 24ths, the notes go to the "default" colors (presumably 4th/red color).
How does this fit in with Domani? It turns out that the area it turns into red note syndrome happens to have a 12th rhythm in it. When the person says "kick" three times in a row, that's a 12th rhythm. And from plasmix's post above, it looks like the dwi converter back then went one measure at a time, but if any 12ths or 24ths were found in that measure, the entire measure would choke as well as what came afterwards. See the picture below to see how this plays out.
Tasselfoot also mentioned Domani as being a file that should be fixed
in this post.