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Is there a write up somewhere breaking down the details of this workflow? I'm super interested why the textures are so restrained compared to the vertex colors. Usually I see vertex colors modifying the texture, but this seems to be the opposite.

I don't remember if Crash Bandicoot does it, but this technique lets you drop textures from models far away from the camera and they still look ok with just vertex shading. Spyro does that for instance. And you also can do palette swaps trivially, like the various colors of man-eating plants.

No such thing as "lighting" here; it's just two different methods for coloring 3D objects, multiplied together The different views here are through noclip, a model viewer; in the original game the two steps likely happened at once, no interim visuals to see