You're writing it wrong -- it should have a comma in there to denote the pause: “Would you like the red shirt, or the blue shirt?”
Are you also speaking it wrong? The part before the pause should be spoken with tone going up, and the part after with tone going down. If you're not pausing and changing tone, then the correct answer is either "yes" or "no", or repeating the whole thing back to mean "yes".
Adding a comma would be non-standard (“incorrect” if you ask a pedantic grammarian) in conventional English prose. Commas don’t always match verbal pauses 1:1.
> The part before the pause should be spoken with tone going up, and the part after with tone going down.
This is a learned cultural convention, not inherently known at birth. I am sure that within another few months my kid will figure it out.
It’s also hard for me to tell sometimes whether he is repeating both because he doesn’t understand that a choice is being offered, or because he wants to repeat strings of words, or because he hasn’t made a choice, or ....
He doesn’t know how to say e.g. “neither one; give me the green shirt” or “you decide for me”.