For me I think people show their true colours in the time of death.... When cornered by the truth When someone is prospering or doing better than them When your down and sick and really need them, etc.
There are many times. Death is one of those times as is when someone is cornered by the truth. Others may be on their best behavior until they feel no one is paying attention or that they will not be caught saying or doing something negative. Abusers will often act one way to gradually isolate their victim and once isolated that is when they show their true colors.
But in all honesty, even when things are perfect or simply good, we can get a glimpse into another person's true colors if we are willing to be fully open to it. It's not uncommon for people to not even allow anyone to speak a negative truth about someone else, they are not open. However, they may be among the many people who say in hindsight that there were clues, glaring signs that even others saw, etc. You say it best when you say "pay attention."
It really comes down to how one defines "true colors". If someone is in a loving relationship and learns their mate is cheating that's an example of a true color. If a person has business dealings with someone and later overhears them badmouthing them that's another example of true colors being exposed. The term "true colors" usually encompasses a falsehood or betrayal in the eyes of the person observing them. More often than not we learn about it long before they are on their "deathbed".
In times of distress, it is easiest to determine things about someone that they may try to hide from others.
Also, I find that you can tell a lot about a person by how they treat their waitstaff when in a restaurant. Not just once though, as everyone has a bad day every now and then. However, if you go out to eat with someone 4 or 5 times and they are constantly rude to their waitstaff, it shows a lot about how they treat others.