The issue has gotten much worse with the recent changes. Originally, it was about the light leaking through the walls and the rooms self-illuminating. Nothing was done about that bug; instead, they changed the lighting system, making the self-illumination even worse.
Now, on top of the worse self-illumination, this extreme orange is added to it. I can’t even stay in Bliss Bay anymore and already had to move over to Cahaya. I am currently trying to furnish an old mansion with my own custom textures, but I cannot judge them properly at all because the lighting ruins everything. For example, a lighter brown leather glows completely orange indoors.
That is exactly why I opened this thread in the first place, to ask if any player knows a setting to improve this or at least mitigate it a little bit.