Hi Sangeetha,
1. Relationships that go from a child table back up to a parent table are displayed in red. These relationships indicate you are moving up to a parent and potentially moving back down to children. This may be correct for your particular extract, however, generally parent or reference tables are usually moved separately from transactional data.
2. GTSubset knows the relationships by querying the database to retrieve the DDL of the database.
Best regards,
Peter