So, today I updated from 4.7 to 4.8 in Debian testing and keyboard layout font got messed up. It got smaller. Is there any way to change it? This keyboard layout switcher can be turned on/off from keyboard options in system settings.

Also, in tray options there is another option for keyboard layout switcher which adds another one (on right). Letters are better there but the color is white which on Classic theme looks unreadable. How do I change that? Either KDE settings or in plasma theme itself.

http://imageshack.us/photo/my-images/407/1942315.jpg/

For the first one, please refer to viewtopic.php?f=17&t=102694&p=224783&hilit=keyboard+layout+icon#p224783

As for the second one, this sounds like a bug in the applet, as it is using the KDE system wide colour scheme rather than the Plasma scheme (which is tied to the theme in use, and different).

the font size is tied to the size of the icon - which itself is fixed by the Plasma System Tray applet

Is there any bug report for that by any chance or is it intended to be replaced with the second one?

I am not aware of a bug report at this point in time unfortunately. You may wish to file one.

https://bugs.kde.org/show_bug.cgi?id=302503