Sorry, this isn't correct. Red is a perfectly valid color value. This is not about property expansion.
This is because the source uses curly quotes, which are not recognized as a parameter bracketing, and so the curly quotes are trying to be interpreted as part of the value.
Change the quotes to actual quotes and it starts working as expected.
No, the OP is correct. You're right that <red> is a valid CSS color keyword, but <”red”> is not. Because of this, the CSS spec treats it as a "legacy color value" and attempts to interpret it as a string of characters (including the quotes) rather than a keyword.
This is because the source uses curly quotes, which are not recognized as a parameter bracketing, and so the curly quotes are trying to be interpreted as part of the value.
Change the quotes to actual quotes and it starts working as expected.