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It's not about C#. I am just

It's not about C#. I am just calling the C methods provided by Libraw. I do not even change the bytes in data field of libraw_processed_image_t, just simply copying it to the memory allocated for Windows Bitmap.

BTW I forgot to mention that also using following Libraw setter methods for process:
libraw_set_output_bps -> 8
libraw_set_output_color -> 0

Also tried the libraw_dcraw_ppm_tiff_writer method using TIFF option which creates a correct, color TIFF file!