A real-world example of this technique shows up in ColorDMD, an LCD to replace DMD displays used in pinball machines from the early 90's until just recently. Most of the displays were 128x32 with 4 (and later 16) brightness levels.
ColorDMD first had artists create color overlays for the images and animations, and then emulated the display with colored dots instead of the red/orange color from the original DMD.
A later firmware release included upscaling, with some impressive results. This thread on Pinside (a pinball discussion site) shows some examples from the game "The Simpsons Pinball Party". I've linked directly to a comment that shows an original rendered DMD frame along with colorized versions with and without upscaling.
ColorDMD first had artists create color overlays for the images and animations, and then emulated the display with colored dots instead of the red/orange color from the original DMD.
A later firmware release included upscaling, with some impressive results. This thread on Pinside (a pinball discussion site) shows some examples from the game "The Simpsons Pinball Party". I've linked directly to a comment that shows an original rendered DMD frame along with colorized versions with and without upscaling.
https://pinside.com/pinball/forum/topic/colordmd-unveils-new...