If I'm not mistaken, File Explorer will be highlighted in red on the taskbar if there is a pending action user must take. However, I canceled the action, and File Explorer continues to be in red.
I had a USB thumb drive plugged in. I was creating an image on that thumb drive using Chromebook Recovery Tool. Once image creation finished, I saw File Manager popup with an alert something like "Windows needs to format drive D to read it". I wasn't sure what it was, I clicked on the format button. It opened the default window to format a drive. I did not want to format it, so I clicked cancel.
Even though I canceled formatting, File Explorer remains red.
Closing all File Explorer windows did not help. The only thing that fixed it was restarting Windows Explorer process in the task manager.