The nails are dipped into acid, which produces bubbles of hydrogen and some aqueous magnesium hydroxide although the latter is only slightly soluble in water. The pink coloring is the acid-base indicator, phenolphthalein, in the presence of The hydroxyl ions of aqueous magnesium hydroxide.

Phenolphthalein is a colourless solution that turn pink in the presence of alkaline but remains colourless in an acidic solution. Its pH range is between 8.0-10.0.

Group 1 metals like sodium and potassium are very reactive when they come into contact with water. So is Calcium which is in Group 2. However magnesium is not so reactive when it comes into contact with water. The reaction with water is slow and can be shown to exist.

The test tube on the left shows magnesium ribbon reacting very slowing with water to give some hydrogen bubbles and some aqueous magnesium hydroxide although the latter is only slightly soluble in water. The hydroxyl ions of aqueous magnesium hydroxide are seen to turn colourless phenolphthalein pink .

Sacrificial coating of an iron nail. A strip of magnesium ribbon was wrapped around the nail before placing the nail in a water. When iron rusts, the iron atoms lose electrons to become iron (III) and iron (II) ions. If this loss of electrons can be arrested somehow, the rusting of iron can be avoided. The top picture shows how an iron was prevented from rusting by wrapping it with a magnesium ribbon. The other 2 nails, not protected in this way, rusted in a day. The Chemistry behind this experiment: Magnesium is more reactive than iron. The magnesium atoms lost electrons first before iron atoms do. This prevented the single nail wrapped with the magnesium ribbon from rusting, as shown by the top picture, right petri dish. The magnesium atoms from the magnesium ribbon have become magnesium ions, forming magnesium (II) hydroxide that is slightly soluble in water.

Mg^o→ Mg²⁺ + 2e^-

With colourless phenolphthalein added into the petri dish, the solution containing the iron nail, wrapped in magnesium ribbon turns pink, indicating that hydroxyl ions are present - indicating a pH value greater than 7. Magnesium hydroxide, like calcium hydroxide, is only slightly soluble in water. 

Group 1 metals like sodium and potassium are very reactive when they come into contact with water. So is Calcium which is in Group 2. However magnesium is not so reactive when it comes into contact with water. The reaction with water is slow and can be shown to exist.

This experiment shows that the more reactive magnesium is 'sacrified' to prevent the iron nail from rusting. Can you think of any practical applications to the above?