If you have any form of lava (source block or flowing) atop any block, and you walk beneath the block under the lava, your screen will go red and display as though you are swimming under lava. The controls, however, are not slowed, and you do not catch fire or take damage.
Conversely, if you are actually swimming in lava (Provided your eye level is within the topmost lava block or the one directly below it), you catch fire and take damage, but your screen doesn't turn red, and you can clearly see the inside of the lava block.

Bottom line: The red screen with lava has an "Off- by- Two" Error.