When the Odor gauge of your livly becomes full, the unpleasant smell will spread and your island will be shrouded in a yellow haze. This is not a malfunction in your device or Meta Livly. Your island will return to its normal color once your livly has been showered.
*If your island screen is still yellow even after showering your livly, please check if there is a wandering livly on your island. Small livlies like Archetype can be hard to find.