If it occurs in the text box for instructions you encode it as an instruction "the" and if it occurs in the text box for data you encode it as a data "the"

Exactly!

Think of how an image of a car and a car in front of you may look indistinguishable in 2D -- but due to your 3D vision you know they're not the same thing (but also know the image is of a car, while not literally being a car).

Likewise, blue tokens are the image of red tokens.