[Fizzlemizz]

Ahh, the code is from the WoD version of ElveUI.

Also, because the workings of the ColourPickerFrame changed in 10.2.5 and I don't believe the Classics have caught up with the changes yet.

From a best guess, I'd say the (presumably) Button frame in the centre of the image is using a standard Blizz. edgeFile for the backdrop that is designed to look like a 3D picture frame with a light shining down from the top left, casting a shadow on the bottom right.

You need to find a flat border edge file or go with something different (maybe just a flat outer texture and a second inner texture (swatch) to display the changing colours?)

Actually the texture use in the code ("Interface\\ChatFrame\\ChatFrameColorSwatch") is pretty flat and used by current Ace. See any addon that has a colour select option and uses Ace (eg. Mapster)