After the exploration with greyscale, as the blog post hopefully explains, I moved from to pulling out black and white separately - which gave better results - to this RGB Channel approach to generate the masks more easily.
I have headroom to squeeze another colour by using the alpha channel as the base colour and using the free colour for some other detail. But so far I've not needed to. Though good to know it's there if I need it to be!
Edit: the Dither pattern implementation is really cool
If there is interest in this sort of thing I will go back and detail it at a later date. However, I will be including more like this plus code, scripts, makefiles, etc in my "making of the game" book.
I didn't see any code, but it sounds like the post was detailing how he marks (manually) which section of his models will have a dither pattern -- basically just masking.
There are a a bunch of posts about it if you go to his blog index, there are only 7 pages so it's easy enough to flip through them, they're all labeled with the DailyDriver name. There might be something in there about the render process.
For browsing my blog you can also click on the tags at the top of each post, which will show you other posts with the same tag. For my game that's: https://blog.gingerbeardman.com/tag/dailydriver/
It’s the upcoming Playdate, developed by Panic: https://play.date/