I can shed more light on this particular problem so everyone knows what causes this.
It is really a simple problem but due to the way rockstar hacked the nif format for bully.....this also causes some unwanted problems when working with these files.
Basicly...whenever you see pink coloring where you should see a texture...this is because when the texture was replaced in the .nft file, what happens is basicly the stored paths that the file originally used were wiped clean....
However...I know something about the bully nft files that noone here likely knows....and that is that while yes you can embed custom textures over the original and get it working....you ALSO can use external textures without even embedding them in the nft file in the first place.
This is kinda like running bully with fully uncompressed textures and gives a easy way to edit a texture without even building a new world.img every single time you want to test a new texture.
I currently have my custom textures set to load off of a usb flash drive that stores a copy of all the textures from the game neatly organised in the original folder structure that rockstar used during development of bully and all I have to do is just edit a file then save it....and simply run the game and the new texture is automaticly loaded and runs just as fast.....
This is NOT however the best way to do things...since if you screw up a texture...the game will look messed up as a result...and I only use this method as a quick easy way to test new textures.....before I package up a brand new .nft file with the texture inside ready to be used.
I have also discovered a way to run bully with every single .img file extracted and not need any .img file to load the game files....but it is VERY complicated but may help the future of modding this game for everyone.
Just figured I would toss all that in here...heheh.
I will post as soon as I get it completed a very detailed tutorial on proper texture editing step by step complete with screenshots of every single step so everyone will know the proper way to edit textures and get them to load without any problems.
I will also in the next few weeks prepare a full tutorial on how to custom rig models and import custom models into the game...vehicles and ped models...as well as fully working weapon models (the weapon models are atm very limited on what you can do until the projectiles for said weapons can actually be edited and customized....haven't figured out a way to do this as of yet)