Like the title says, the /me chat coloring is the point of using /me. It explicitly differentiates it from normal chat.

Instead of removing it wholesale, consider adding an option on user/mod/streamer level to display it or not.

Or at the very least give the streamer the option to turn it off. Don't kill a great feature for a select few who find it "confusing".

The /me command's distinctive color was a great way to differentiate streamer-implemented automated messages or important messages from mods (e.g. Rule explanations, warnings). It would be great to bring back the color but limit it to specific chat roles to limit abuse.

A lot of me and my friends used the fact that the /me command made the message show up in colour as a way to add more colour (and make it easier to read messages in chat). the fact that it now only removes the ":" after the user name before message shows up is completely rubbish.
We have also used it for doing "rainbow raids", as in the raid messages shows up in all the colours of our names to make raids even more hype.
I haven't seen any of the so called "abuse" you claim has happened... and the fact that we could have messages in colour added a lot of good to the experience.

The /me helps to spread color throughout twitch and the chat. Especially during raids. Please dont get rid but maybe add Bold to the /me so it can be seen more easily?

Basically kids come into chat all the time then do /me donated $100 and stuff and it gets very annoying for me a fellow mod, please remove this feature as there is no reason for it.

add a configuration option in the channel to allow or reject the use of /me in the chat by the users.
mods and bots can always use /me, but based on the configuration, /me is availableor not in the chat for "regular" users (no followers, followers, subs, vips)

You can already blacklist /me in your Automod Denials

Yes, please!

Adding an option to disable /me (or .me) in mod view/by a streamer would mean one less thing that the mods have to look for while modding in the many channels where it is not allowed.
Perhaps with this option enabled, the message where chatters try to use /me would simply stay as normal text, however being automatically deleted would work as well.

Moderators and broadcasters use /me to make their messages stand out to give information to the viewers, but viewers can also use /me to troll, to get attention...ect. I think it would be beneficial for the broadcasters to be able to disable /me for whatever userlevel they want.

Add a switch for turning off /me in your own channel, its long time problem, and its so annoying. Would be great, thanks

The new twitch chat is impossible to read and gives me a headache when trying.