[jlam]

I dry-coded this (didn't run, didn't check for syntax errors), but hopefully it gets the idea across. It looks like you're mainly concerned with replacing names with class-colored versions of those same names, and you have two functions for doing the name-replacement in slightly different ways. Since the two functions are so similar, I made them into a single function implementation.

Now that I see what you're trying to accomplish, I think there's something smarter that can be done to iterate through chatMessage and alternate grabbing whitespace and non-whitespace. I'll think about how to do that tomorrow when I have time.

-- Gets a name from the given string after stripping out punctuation.
local function getName(s)
    local stripped = s:gsub("'s$", ''):gsub('%p', '') -- strip possessive then punctuation
    local name, realm = UnitName(stripped)
    local fullName = (realm and realm ~= "") and name .. '-' .. realm or name
    if fullName == stripped then
        -- "stripped" isn't a unit ID or GUID.
        return fullName, name, realm
    end
    return nil
end
 
--[[
    Extracts a full name (relative to the player's realm) from the given string
    Returns:
        unit ID: a unit ID that can be passed to unit functions, or nil
        fullName: "name-realm", or "name" if the realm is the same as the player's realm, or nil.
--]]
local function extractFullName(s)
    local fullName = getName(s)
    return fullName, fullname
end
 
--[[
    Extracts a simple name (no realm), or "you" or "your", from the given string.
    Returns:
        unit ID: a unit ID that can be passed to unit functions, or nil
        name: "name" with no realm information, or nil.
--]]
local playerName = UnitName("player")
 
local function extractShortName(s)
    local fullName, name = getName(s)
    if fullName then
        return fullName, name
    end
    local stripped = s:gsub("'s$", ''):gsub('%p', '') -- strip possessive then punctuation
    local lowered = stripped:lower()
    if lowered == "you" or lowered == "your" then
        return playerName, stripped
    end
    return nil
end
 
-- Replaces name with class-colored names in chatMessage.
local hexColorNames
do
    local coloredMessage = {}
 
    function hexColorNames(chatMessage, modChatColor)
        extractNameFunc = extractNameFunc or extractFullName
        wipe(coloredMessage)
        for word in gmatch(chatMessage, "%S+") do
            local unit, name = extractNameFunc(word)
            if unit and name then
                local _, class = UnitClass(unit)
                if class then
                    local coloredName = "|c" .. RAID_CLASS_COLORS[class].colorStr .. name .. modChatColor
                    word = word:gsub(name, coloredName)
                end
            end
            table.insert(coloredMessage, word)
        end
        return table.concat(coloredMessage, ' ')
    end
end
 
local function modHexColorNames(chatMessage, modChatColor)
    return hexColorNames(chatMessage, modChatColor, extractShortName)
end