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Answer: The process is diffusion.
Explanation:
a dark liquid will have the highest concentration of dark purple atoms/molecules so it gives a concentrated colour.
when water is added to it, the colourless water molecules fill up the gaps between the purple particles and so their colour fades and becomes lighter and lighter as we add more water. see the image attached where imagine the red particles are water and the blue particles are purple particles. thats why the colour fades.