Re: avatar background color if image too small
This is not an bug with BuddyPress. This is not a bug with anything else either.
There is a minimum image file size (50px by 50px) that must be uploaded for avatars. If the file is smaller in width and/or height than the minimum required, the extra pixels will be black.
You could change the minimum file dimensions, but it seems to me that the set minimum is more than sufficient.