Code:
on ^*:Text:*:#: {
  var %1- = $1-
  while ($istok(%1-, lol, 32)) %1- = $reptok(%1-, lol, 4Laughing Out Loud, 1, 32)
  if $highlight($nick).color {
    echo $v1 -mbflirt # $+(<,$nick,>) %1-
    halt
  }
}


Using the same code you used, with a few minor modifications with something of my own, I was able to reproduce the fact that while the nickname may be highlighted, the text I want highlighted using ctrl+k (Laughing out loud) remains black so it would look like:

[04:03] < @Nick > Laughing Out Loud that is funny

What i'm going for is something like this:

[04:03] < @Nick > Laughing Out Loud that is funny

See what i'm getting at is how do i fix that because its currently 4:10 am and im scratching my head over it

NOTE: Quickly written so try not to nit-pick the way i done this. I wasnt going for perfection, just to make a point