Well - what does this mean:
When a new item is submitted the form's people picker loses its bg color
Is this a SharePoint List form?
I think SharePoint Lists can have multiple forms associated with them - any chance the form for "view" has the change and "edit" does not? I've not run into an instance where a form displays correctly in the browser and not in preview (usually it is the other way around).
Saving a form as source files can be done from the Publish menu --> export source files