To reproduce:
1. Open project test
2. Select GameAssets > VFX > FX_Mage > TestBug and add this prefab to the scene. Make note that it's preview is normal
3. Open Animation and select a random frame (for the TestBug in scene)
4. While the Animation is still open hit Apply on TestBug
5. Inspect the prefab - it's preview is now a magenta square and if you were to add it to the scene it would appear wrong as well

Note: this can be fixed by selecting something else in the scene (so the animation frames reset), then selecting TestBug and hitting apply again.