This looks like the shadow areas are clipping in one or more channels due to underexposure. Without risking the highlights of the image blowing out, there's not a lot you can do to avoid that in certain situations - cameras have a limited dynamic range that they can capture, between the brightest and darkest parts of an image. If the brightest parts of your image aren't blown out, you have a little room to increase the exposure (longer shutter and/or wider aperture); or if blown highlights are acceptable - depends on what you are trying to capture. Dynamic range also generally decreases with higher ISO, so using the lowest ISO you can get away with for the scene might help too.

The flashlight on a phone is not bright enough to damage a sensor, especially when you have the lens off and there's thus nothing to focus the light into a sharp point. But, even with a lens on, cell phone flashlights just aren't all that bright - directly aiming at the sun for a long period would be another matter, though...