Basically, it only works if the unit is visible, when it should probably also work in unprotected garrisons that don't show the unit, like TCs and ruined fortresses, just like almost all other abilities (except for heal and mend, which are hard-coded that way if I'm not mistaken, maybe area effect skills work like that too?).
(just a small observation: I don't know for sure it works for protected garrisons that show the unit, since afaik great flags were the only unit with those properties in the game)
Green is the correct color, other colors are "less correct".
SYSTEM_SPECIAL_EFFECT_TARGET_AND_AREA just works like that, because it was designed with some sort of magical area spell in mind.
It cannot affect those protected by garrison, unless some very extensive changes were made (look how assassin inside works).
And with any of such - there is no way to tell if final effect would work like desired.
BTW. My plan was to make it an aura, which affects units inside, but unfortunately AURA_EFFECT can only apply limited number of different effects types.
INSTANT, ENCHANTMENT and REPETITIVE_VANISHING if I remember my tests right.