Does thermally modified wood fade?

The simple answer is yes. There is not a natural exterior wood product that will not fade over time when being exposed to the suns UV rays. UV light has the most impact on color change. You only have to put a piece of unfinished wood out in direct sunlight for a short time with part of it covered to see how the sun’s ultra violet rays affect it.
Thermally modified wood must be adequately protected against UV rays to counter the premature fading and graying effects of surfaces, however this does not effect, in anyway, the structural integrity of the thermally treated wood product. The process of thermal modification, if done properly, ensures that the structural integrity of the wood remains long after the wood has turned gray.
There are numerous surface treatment products in the North American marketplace but one product that has been used on thermally modified wood with good success is a product called Cutek Extreme. Cutek Extreme deeply diffuses into wood and provides long lasting protection from within. This means that the wood will continue to resist water and remain stable even after the surface has faded or silvered. Re-coat preparation consists of a simple wash-down of the wood, rather than conventional sanding or stripping, resulting in significant savings in ongoing maintenance costs and time. Applying Cutek does not mean that your wood surface will never fade if not re-applied but it does prolong the natural look of the thermally treated wood until another coating application is applied.