Hi! I'm working on a cartoon-ish game at the moment and we are using vertex color only to paint our objects. Most of the time, I'm colouring per face in 3d studio, so I can get hard edges in the colouration. It works pretty fine in max, but when it comes to export it as a fbx (or any other format), the face color…
Well you need separate vertices to have separate vertex colors. otherwise you get exactly what you've posted, as the edge verts are all shared, so they have to pick one color or the other on export. Detaching the faces creates individual vertices so they can be colored appropriately.