It was simply grey, or thinned black, paint. Some pilots did it, some didn't, as photographs clearly indicate; quite how the "It's weathering" brigade reconcile a "dirty" insignia with a pristine fuselage will remain a mystery.
4 Group, in Bomber Command, started it off, in July 1942, when the old roundels, with broad white circles, prevailed on the fuselage. They painted over the white with medium sea grey, and the yellow with a mix of yellow and dark earth. This got them a rollicking from "Head Office," but eventually led to the "Type C1" roundel, with thin white and yellow circles.
When South East Asia Command asked for permission to do away with the red, in all roundels, they, at first (and grudgingly) got permission to leave the centre white, but they soon came back, saying that the white was far too bright, which was when they were allowed to have a light blue centre.
Edgar