I was wrong... I did find a picture of one of the ugly orange sibling seedlings. (How those two daylilies came from the same cross is beyond me.)
How to explain mud? I'm going to draw on examples, using daylilies that were/are recently blooming in my garden.
To me, muddy daylilies are ones where the underlying (yellow?) tissue makes the overlying colors look dirty... or less clean... certainly less clear. I'm not sure if I have ever seen a
muddy looking yellow or near-white daylily, though there are some that look cleaner, or clearer, than others. Recently I saw my first blooms on a gift plant of Mike Huben's 'Sunshine on Clouds'; those blooms were a very clear yellow.
Mud is possible in daylilies of other colors, and I've certainly seen it in lavenders, burgundies, some reds, and oranges. (The issue becomes a little murky with pinks and peaches (pun intended), though there are some of those which I think have underlying mud, too.) Meaning no disrespect to the hybridizer (and this is by far not the worst that I have seen), while 'Heavenly Dragon Fire' has great eye-attracting color when seen from a distance, close up, to my eyes, the color looks somewhat muddy.
Clarity would be the exact opposite of muddy. Today I saw my first bloom on Mike Huben's 'Let Me Be Clear', which is a
very clear, pale pink. The bloom was almost ethereal.
Once you've seen clear color on a daylily bloom, you become sensitive to mud.
I might be all wrong, but that's how I see it, and that's the best that I can explain it.