This is a rather complex issue to explain if you’re not familiar with the background, and it gets particularly tricky because people use the term “colour space” to mean too many different things. In an attempt to clarify, I’m going to use the following not-necessarily-standard terms: when I say “colour decoding standard” I mean the formula used (in any given colour space) to map between YUV and RGB values; when I say “colour gamut”, I mean the range of possible colours that the colour space allows one to display, and, in particular, the position of the primary colours (red, green, and blue) on the CIE diagram. I’m also going to use the terms “PAL” and “NTSC” very imprecisely: “PAL” here means the type of DVD find in the UK (720x576i video, 50Hz, Region 2) and “NTSC” means the type found in the US (720x480i, 59.94Hz, Region 1).
High-definition (non-HDR) video uses the rec. 709 colour space. Rec.709 defines both a decoding standard and a gamut. DVD video, however, uses different colour spaces. Both “PAL” and “NTSC” DVDs use a colour decoding standard called rec.601, but they use two different colour gamuts: PAL DVDs use one called EBU, and NTSC DVDs use one called SMPTE-C.
So, a video value specified in a DVD rip consists of YUV values; compared with the same YUV values in a SDR blu ray rip, that doesn’t just specify a different amount of red: it specifies a different amount of a different red (and the same applies to blue and green).
When you send an upscaled image to the display, that has to be in rec.709 format, because that’s the only kind of hi-def signal the TV understands. So, as part of the video pipeline, it’s necessary to map from the DVD colour space to rec.709.
Last time I checked, Kodi was using a matrix calculation for mapping from one colour space to another. This correctly takes account of the difference in the colour decoding standards, but it doesn’t take account of the difference in the gamuts. You more or less get away with that for PAL DVDs, because the EBU and rec.709 gamuts are quite close; but for NTSC DVDs, this means the final image always has slightly over-saturated colours.
Realistically, the only way one can reliably map between colour gamuts is to use a look-up table. So, my suggestion is to distribute a standard Kodi look-up table with OSMC, whose function is to map correctly from SMPTE-C to rec.709 gamuts.
(The calculation/construction of such a table is beyond my abilities, I’m afraid. )