yes, green and pink stickers are defects, such as exhaust - too noisy or not having one, lowering under 100mm - cut springs or no springs are the 2 main ones, but others are, no bonnet etc.
to get rid of it, we just need to fix it and then take it into vtnz - vehicle testing nz, and get a new warrant of fitness, then its all legal again :)
are rules are very slack compared to yours, engine conversions are dime a dozen, and there is very little rules regarding them.