Expanding Image to Grease Pencil functionalty - Color

Where in the source code would I start to look at the Trace Image to Grease Pencil functionality? I would like to investigate methods to bring in color as strokes.

You could look at editors\gpencil\gpencil_trace_utils.c and editors\gpencil\gpencil_trace_ops.c. From a quick look at it, it uses an external library, Potrace, for the tracing itself.