Unfortunately it doesn't work if you forbid unbound variables with set -u. Like this (as suggested in the Unofficial strict mode article: https://news.ycombinator.com/item?id=8054440):

  $cat z
  #!/bin/bash

  set -u # fail if unset variable is used

  if [[ -n ${COLODEBUG} && ${-} != *x* ]]
  then
      :() {
          [[ ${1:--} != ::* ]] && return 0
          printf '%s\n' "${*}" >&2
      }
  fi
  
  echo hello
  $./z
  ./z: line 10: COLODEBUG: unbound variable
  $

The -n test should look like this:

  if [[ -n ${COLODEBUG:-} && ${-} != *x* ]]