I would say that similar things said of the Mercury spacecraft could be said about any complicated system, even today.
The design uses sensors with functional limitations. So a mechanical switch closes when a fairing is jettisoned, or a door is opened, and the circuit turns on a control panel light.
But there could be a mechanical failure of the switch, or a break in a wire, or a broken lamp filament, that could prevent the illumination of the panel light. There would be other possible scenarios where the light would illuminate when it shouldn't.
Part of the piloting function (for a crewed vehicle) and mission control function, is to understand and interpret such sensor readings. This was especially demonstrated with Apollo 13. And we see it with current Mars probes, among many other places.
It may not be the case of a particular light being green or red, but similar sensor interpretations would need to be applied.