How do camo traps work?

So I was trying to get the achievements for using powers, and in doing so I dumbed almost every power I had on the map.

Fig-1: Power dumb game

Most powers I had not used before, but seemed pretty straight forward. That the road spikes where a bunch of spikes you could place on the track to pop bloons was quite clear. But what puzzled me was what the camo trap did.

What the game says

The ingame descriptions says:

Fig-2: Camo trap description from the store

Monkey Engineering at its finest, this trap will remove Camo state from the first 500 Bloons that touch it.

Now that seems pretty straight forward as well, but I remember that during this game, some of the traps I had placed on the map would turn red. It was an 80 round game, and I believe most traps were not used in the end as well. I don't think I saw the camo removal effect actually happen and I haven't touched the camo traps since this game. Could someone maybe clear up for me what the camo trap actually does and how to use it?

Could someone tell me:

1. What the camo trap does (remove camo from bloons right?)
2. What it means when a camo trap turns red
3. How to tactically use camo traps and what not to do with them