Hmm... that does look a bit odd. :??
Row 1 looks fine (knitting 27 with color A), but on row 2 it looks like you are knitting 17 with color b, purling 1 with color A, knitting 7 with color b and then purling 1 with color A....
I think this is not a "true" illusion chart, more like a combination of intarsia and illusion... :shrug:
I personally would "shift" all the "wrong color" blocks down to one row and knit them as if they were part of that row, instead of the row above. That way all the rows would be of only 1 color and the "illusion" would be created by the difference in heights of the knits and purls, that would look more like the "illusion" chart I am used to.
Anybody else have any ideas?