It's probably fine that replies to your own messages get turned into highlights. But it's not ideal that it makes the whole message red. And in fact, highlights in general probably shouldn't be entirely red - only the bit which actually highlighted you.
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From discussion on https://github.com/matrix-org/matrix-react-sdk/pull/2896
it sounds like we need to find a different approach that still highlights even without pills.
I'm on the web client and I see mentions are highlighted with a light yellow background color. Wouldn't that be sufficient, or am I misunderstanding the discussion?
A bit of a tangent, but I'd also like to suggest changing the color from red to anything else. Red in UI is associated with error/danger states, so as an end user I wasn't sure if it indicated some problem the first time I saw it.
Here's a screenshot of how replies look currently:

It's worth noting that it doesn't appear this way on mobile:

Both screenshots taken from the perspective of the user "Jimmy". (Shared with Sama's permission)
As others have noted, the red is quite ugly and bad. I hope that the Element team will improve things, or at least give us an option to disable message highlights.
My personal opinion is that the yellowed background is enough to highlight a message, and the text doesn't need to change color as well. This is how Discord does mentions:

Most helpful comment
From discussion on https://github.com/matrix-org/matrix-react-sdk/pull/2896
I'm on the web client and I see mentions are highlighted with a light yellow background color. Wouldn't that be sufficient, or am I misunderstanding the discussion?
A bit of a tangent, but I'd also like to suggest changing the color from red to anything else. Red in UI is associated with error/danger states, so as an end user I wasn't sure if it indicated some problem the first time I saw it.