Yes that's true but it's not really a bug.
The problem is that the copy and paste works between LFS and other programs, using the windows clipboard. And with the new system if you type ^1 (for example) then you would actually see ^1. And the paste function works simply by typing in characters sequentially from the windows clipboard.
It would be quite easy to make it use colours if the copy and paste didn't go outside LFS. But because it does use the windows clipboard, with the new system, it's more difficult to make it insert the colour codes. Also, allowing the colour codes would cause some errors when pasting text from windows. For example ^v copied from windows would appear as | in LFS.
I think that's a bit of a confusing explanation. But my question is, how important is it to be able to copy text with colours? Before the patch, i was trying to think if that was ever important, but decided it wasn't really that important. But maybe you have a reason i didn't think of.