Background color fooling your eyes?
Nope. Wish it was that simple. The desaturation is strong enough to notice easily. Cut/paste the effect to another clip, same results. Sequence settings match source. No other effects applied.
I'm not sure which version of Mercalli you are using, but I just upgraded to the recently releaed v.2 Pro and have had no problems (for HD footage) just using the default settings- both for static shots and pans. It seems HUGELY better than the prior version- in fact it seems magical.
I've certainly had no issues with color, saturation, borders, etc.
If you are using the older version, I would encourage you to take a hard look at v.2
using v2/latest rev
usually works. this is one of the few times i needed 'best' settings.