Olympus EM5 - profile issue (probably), raw file example provided

Question

Olympus EM5 - profile issue (probably)
raw file in question, posted by somebody in dpreview forum = https://dl.dropbox.com/u/50147350/P8261159.ORF

Answer 1

As evident from your screenshot, those letters are not blown in raw - there are only a few pixels where one of the channels (blue) is reaching saturation. However, that blue color is very saturated and is mostly falling outside output color space (which is usually sRGB or Adobe RGB) or in other words, your monitor isn't able to display that color
Conversion from raw color space to output color space is done using profiles and can be colorimetric or perceptual. If conversion is colorimetric, colors outside output color space are simply clamped into the range (for instance RGB  -15, -30, 270 --> 0, 0, 255). If conversion is perceptual, colors that would fall outside color space are compressed into it (for instance it could be  -15, -30, 270 --> 10, 5, 253). In first case, colors inside output color space are 'correct', while those outside are wrong - less saturated and possibly with wrong hue. In the second case, colors outside color space are 'less wrong', but colors inside color space are also 'less correct', but overall result is mostly more pleasing to the eye. This compression is performed differently by each manufacturer.
Each camera model has own set of profiles. Most simple profile is an 3x3 array named color matrix, used for this color conversion - it is embedded in ACR for all supported cameras and can be also written in raw file. It is colorimetric. Then there is Adobe standard profile for all supported cameras in form of dcp file. It is a combination of matrix and lookup table conversion, which is still close to being colorimetric (however, there are several versions). Other profiles that are emulating camera rendering are perceptual (on some cameras there is also one profile said to be colorimetric, for instance Faithful profile in Canon cameras). Unfortunately, there are no camera profiles for Olympus yet, so colorimetric conversion is the only option (ok, another option is using new version of sRGB profile and its perceptual rendering intent, but it is not possible directly in ACR).
In this particular case, you can improve the look of those letters by moving saturation slider of blue primary (camera calibration tab) from 0 to about -15, which will modify color matrix used for conversion and desaturate whole blue range. Or do the similar thing with slider in HSL tab
If PV2010 used, some of blown blue color turns violet. It's also a know issue, actually I also reported it several years ago, and is caused by usage of Photo pro color space as intermediate and some clamping of values in ACR workflow. In this case it may be corrected in calibration tab by moving blue hue slider a bit to left, which will change hues of blue range towards cyan.
Etc. This area is quite complex, I'm familiar only with a small part of it, which I needed for making camera profiles