Paul, thanks very much for your reply!
I wonder if you're referring to a different version of Word (I'm using 2016)? See attached for the options in Show Document Content that I see. I can't find an option for diacritic colour anywhere in any of the option groups (unless I'm somehow missing something obvious).
The
information I had seen was the diacritics are in red because Word is marking them as 'unsavable' in the selected encoding standard, none of which seem to work, including the various Unicode ones (!). I believe this is where the issue lies. I just wish I could suppress the red colour. I hope I'm just missing something obvious!