I'm having an issue where only the cutscenes are stuck in black and white mode and that option is not selected in the options. Anyone have this problem and was able to fix it?

Try to install K-lite Codec Pack, that helped me!

Just curious, are you running Windows 11? I am getting the same issue all of a sudden. Did you use any patches? Download this:

https://mega.nz/file/hsphwLaT#yzFi_rzoW7LH_gZEKDHYlyjoJGoDNq8CvbW94ZO0bQQ

Copy the three files, wc4dvdfix, mpeg2.dll (overwrite the one in there) and mpeg-2.exe. To the main directory where WC4 was installed.

Run the DVD fix, and let it patch the WC4DVD files. (Click patch)
Then run the MPeg-2.exe and let it patch the MPEG file. (Click install CODEC)

Then your game should run normally, with no need for compatibility. Your movies will be in color, and you should have no disparity with volume.

No im on windows 10. no patches.

EDIT: So I tried to run WC4DVDFix and it says "Filesize Mismatch!"

I just tried this and it's not working for me

Both K-lite Codec and the wc4dvdfix did not work.

I am having the same problem. All of the cutscenes are in black and white.

I'm seeing reports elsewhere that this is due to more recent Nvidia drivers.
Haven't seen any description of a fix, other than using older drivers. 522.25 is described as functioning.

So it looks like this needs a proper fix, either via Nvidia, GoG or a fan patch.