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What is the difference between the menu commands Colored Outlines and Outline All Faces?

Outline All Faces means that the rim of every Face in your Room will be drawn in a specific color.
If Colored Outlines is switched off the color to be used depends on the settings in the Dye menu, e.g. White Faces will cause white outlines.
If Colored Outlines is switched on then the colors chosen under Options/Colors/Face Outline will be used