This is due to the CR at the end of the line. A simple way to reproduce
the bug is:
printf 'X\r\n' | grep --color=always -E '(X|[[:space:]])'
This will output a line that appears to be empty. If you filter the
output of 'grep' through 'od -c', you'll see:
0000000 033 [ 0 1 ; 3 1 m 033 [ K X 033 [ m 033
0000020 [ K 033 [ 0 1 ; 3 1 m 033 [ K \r 033 [
0000040 m 033 [ K \n
That is, begin color, erase to end of line, X, end color, erase to end
of line, begin color, erase to end of line, carriage-return, end color,
erase to end of line, linefeed. The last "erase to end of line" erases
the X.
As can be seen, the grep --color output is busted in this case, and is
suboptimal in general. Someone who cares about grep --color (which is
not me :-) should take a look at it.
You can work around the bug by filtering out the CRs before running
'grep', or by not using the --color option.