I won’t say that this blade is properly heat treated; it probably isn’t. In welding, the problem is the wide variation of heat affects in a very small zone. You can have material that is very brittle just millimeters away from material that is very soft and ductile.
You’re describing “normalization”, which is a process that makes steel uniformly tough, but “plastic”. When you flex it, it bends, and stays bent. “Annealing” is a similar process, where the temperature is raised a bit higher, and the cooling slowed even more. “Annealing” leaves the steel very soft.
In tool making, you’re first looking for high hardness (acquired with a “quenching” process). This makes it very brittle; it has no elasticity.
Next, you’re dialing back that hardness with a “tempering” process, which is done at a lower temperature than the normalization process, and the cooling can be much faster. When tempered, it’s still very hard, (significantly harder than “normalized”) but now it is slightly elastic. It will flex, but beyond a critical point, it just snaps; it probably won’t take on a permanent bend.
These colors are oxide layers that form at temperatures in the “tempering” range.
This is accurate enough for tempering of most cutting tools, but technically, the oxide layer will continue to grow if you hold a lower temperature for a longer than normal time, and might not fully develop if you reach a higher temperature for a shorter than normal period of time.
This property useful if you are trying to develop a specific color rather than achieve a specific metallurgy. You can heat to a lower temperature for a longer time to develop a deeper, more consistent color.
In my experience, it’s easier to develop colors with an oven or propane torch rather than a forge or acetylene.