palcolor = col (int)
palinvertall = invertall (bool)
palbright = add_r, add_g, add_b (int)
palcontrast = mul_r, mul_g, mul_b (int)
palpostbright = add2_r, add2_g, add2_b (int)

These parameters determine palette effects to be applied to all afterimages. First the color level is adjusted according to the palcolor value, then if invertall is non-zero the colors are inverted. Afterwards, the palbright components are added to the corresponding component of the player's palette, then each component is multiplied by the corresponding palcontrast component divided by 256, then the palpostbright components are added to the result. The value of palcolor ranges from 0 (greyscale) to 256 (normal color).

For instance, if the red component of the character's palette is denoted pal_r, then the red component of the afterimage palette is given by (pal_r + add_r) * mul_r / 256 + add2_r, assuming palcolor and palinvert are left at their default values. Valid values are 0-256 for palcolor, 0-255 for palbright and palpostbright components, and any non-negative integer for palcontrast components.

The defaults are:

palcolor = 256
palinvertall = 0
palbright = 30,30,30
palcontrast = 120,120,220
palpostbright = 0,0,0

paladd = add_r, add_g, add_b (int)
palmul = mul_r, mul_g, mul_b (float)

These parameters specify palette effects that are applied repeatedly to successive frames in the afterimage. In one application of these palette effects, first the paladd components are added to the afterimage palette, then the components are multiplied by the palmul multipliers.

These effects are applied zero times to the most recent afterimage frame, once to the second-newest afterimage frame, twice in succession to the third-newest afterimage frame, etc. Valid values are 0-255 for the paladd components, and any non-negative float value for the palmul multipliers.

The defaults are:

paladd = 10,10,25
palmul = .65,.65,.75

[State 810, 1]
type = AfterImage
trigger1 = time = 1
time = 170000
length = 9
framegap = 3
palcolor = 256
palinvertall = 0
palbright = 0,0,0
palcontrast = 256,256,256
palpostbright = 0,0,0
paladd = 0,0,0
palmul = 1.0,1.0,1.0

If it's too bright, try adjusting all the palbright values instead of just the red value. Such as -30,-30,-30. I don't think the PalFX takes actual character colors into consideration so there would be no extra red to adjust for.

While mugen lies a lot, I don't think it is here honestly.

(pal_r + add_r) * mul_r / 256 + add2_r

[State 810, 1]
type = AfterImage
trigger1 = animelem = 2
time = 170
length = 9
framegap = 3
palcolor = 256
palcontrast = 257,256,256
palpostbright = -32,0,0
palbright = 0,0,0
paladd = 0,0,00
palmul = 1.0,1.0,1.0

[State 810, 1]
type = AfterImage
trigger1 = time = 1
time = 170000
length = 9
framegap = 1
palcolor = 256
palinvertall = 0
palbright = 0,0,0
palcontrast = 257,256,256
palpostbright = 0,0,0
paladd = -32,0,0
palmul = 1.0,1.0,1.0
persistent = 170

[state ]
type=afterimage
time=-1
length=9
timegap=1
framegap=3
palcolor=256
palinvertall=0
palbright=123,456,789
palcontrast=321,654,987
palpostbright=987,876,765
paladd=0,0,0
palmul=1,1,1
trans=addalpha
alpha=64,256
trigger1=time=1