are the area fight and debt encounter both affected by this?
the encounters where they display the colored character model are affected by the color choice. That would include the arena fight and the debt encounters.
What is affected by the additional choices(relevant to people who care about 100% completion or something like that) would be instances of the different colored encounters being just events that TRIGGER the different color displays such as being buttfucked while facedown and riding on the bunny's lap.
example would be any event that triggers buttfucking facedown while cream option is selected would count as a separate event than buttfucking facedown while chocolate option is selected.
Also any event that would trigger when buttfucking facedown when a separate color option is chosen counts towards this.
An example would be going to demon lord tavern that would end in buttfucking from drinking too much and paying with body to recover debt are different encounters that both trigger buttfucking and either can be used to achieve the different colors for different favourite flavor options in terms of completion.