Is the pH changing as you add the Mg? If the solution becomes basic, a proton might be removed from the hydroxyl group and causing it to become a ketone; the electrons rearrange to form a different resonance structure, and hence the color change. I'm probably over-simplifying the explanation, and guessing as to the cause.

Phenolics, are a class of chemical compounds consisting of a hydroxyl group (—OH) bonded directly to an aromatic hydrocarbon group. The simplest of the class is phenol, which is also called carbolic acid C6H. Natural phenols spectral data show a typical UV absorbance characteristic of benzene aromaticity at 270 nm. However, according to Woodward's rules, bathochromic shifts often also happen suggesting the presence of delocalised π electrons arising from a conjugation between the benzene and vinyls groups.As molecules with higher conjugation levels undergo this bathochromic shift phenomenon, a part of the visible spectrum is absorbed. The wavelengths left in the process (generally in red section of the spectrum) recompose the color of the particular substance. Acylation with cinnamic acids of anthocyanidins shifted color tonality (CIE Lab hue angle) to purple.Natural phenols are reactive species toward oxidation, notably the complex mixture of phenolics, found in food for example, can undergo autoxidation during the ageing process. Simple natural phenols can lead to the formation of B-type procyanidins in wines or in model solutions. This is correlated to the non enzymatic browning color change characteristic of this process. This phenomenon can be observed in foods like carrot purees.The flavonoids are substances produced by plants in order to provide protection to their cells from particularly harmful UV rays and other plant pathogens.Flavonoids have a number of positive features, among which the most significant are their antioxidant effects. With this help they provide enhanced protection against especially harmful reactions and free radical reactions in the body. These also change color when come in contact with iron or magnesium 

Yes Flavonoids change color when reacting with Mg, Fe, or Zn in acidic solutions. My question is why? It sounds that this is a complex formation and we usually apply Crystal Field Theory to explain colors. But how d-splitting could occur for Mg when it doesn't have any? and how a complex can form?! ( This reaction is a diagnostic test to detect Flavonoids via UV absorbtion)