Ho and Lai were engaging in Self-Parody
Those brightly coloured Highly-Visible Ninja costumes with 'Ninja' written on the headbands look so ridiculous, it's almost as it they did it deliberately. Perhaps they realised they were making such completely rubbish movies, or understood that their ninjas were so totally unlike the actual ninjas of feudal Japan that they wanted to send up the fact by making their ninjas as un-ninja-like as possible and give the audience something to be amused by and stop them thinking "why did I spend my hard earned dollars renting this crap?!?"- Alternately, a form of Take That, Audience!. As if to prove "you guys really will watch any old crap we put out, won't you?".
- To be noted that some of the earlier films apparently didn't have the "ninja" headbands, if recalled correctly.
The ninjas in the movies are not related to the real ninja of Japan.
Instead, they're rival Hong Kong-based secret societies made up of a mixture of white Western colonials/migrants and Chinese whose codes of practice are very loosely ninja-themed. They originally started out as a group of "ninjaphiles" who formed a Brotherhood of Funny Hats but started making it Serious Business and some factions turned to crime.