These were one of our 'tools of the trade,' as I was in a Pathfinder platoon. The color we'd use didn't have any particular significance when we used them to mark our HLZ. The significant part to us was having the aircraft report to us the color they saw, to make sure that they were coming up on the correct site. (We also employed that good 'ol VS-17 panel and signal lights.)
For DZ ops, we used them as a means of letting the Jumpers know the wind direction in order to let them know which way to turn their parachutes to get better landing. I recall that some DZ parties would only use red smoke if there were unforeseen dangers which popped up (unsafe sudden rise in wind speed, obstruction on the DZ, etc).
Had to be mindful of the wind when we tossed them out to mark our DZ/HLZ, lest the smoke billow back on you and your site.
I went through the Pathfinder course at Ft Benning back in '84 and at the time we each had loads of these in and amongst our issue and personal kit. I left Benning with about 25 to 30 of those things, which I happily used at a couple buddies' weddings, special sporting events, and more miscellaneous "special" occasions than I'll admit to here!