Am I missing something? Is this something that one would expect to be covered in the legal agreements that "link" a real-world asset to a particular set of colored coins? Something else?
youre not missing anything, Color Coins[1] are going to be a nightmare in practice. They seriously distort the economics of mining. I raised this many times on the BitcoinX list, but the main protagonist/troll on there 1st: refused to acknowledge the problem 2nd: acknowledged it but didn't fix it. He spends months doing precisely NOTHING but sounding off and trying to look important(but not succeeding). This is probably why it seems the only project in that neighborhood with investment money did not include him.
It's these very problems, and a few other revelations that led to my development of Confidence Chains.
Confidence Chains has none of these problems. It doesnt use mining at all.
[1] and presumably Mastercoins