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Sailing off-map causes the water and sky to turn red.
The Devil's Shroud, also better known by its community given name The Red Sea, is a shrouded boundary of the Sea of Thieves. Anyone who enter becomes disorientated and will end up lost within the fog, while it slowly dissolves all not-living organic matter and man-made materials that it touches. The environment starts to become dark and ominous with black clouds that blackout the sun, as the sky and the sea themselves become as red as blood. Soon, haunting and eerie sounds can be heard as the ship begins to break apart and sink.
In-game, the shroud continuously damages the ship and respawns the player to a new ship if they manage to sail too far. The shroud occasionally shifts back and forth across the land, but the only known power that can dispel the shroud is the Shroudbreaker totem, an artifact used by the Ancients to expand the hospitable sea.
Lore
In the Sea of Thieves Lore/Art Book and the Sea of Thieves Comic the Devil’s Shroud is described as an ominous grey fog bank surrounding entirety the Sea of Thieves. Anyone who enter this becomes disorientated and will end up lost within the fog, while the fog slowly dissolves all not-living organic matter and man-made materials that it touches. Also it appears that the Devil’s Shroud is protecting the world of Sea of Thieves from the Outside World or it may be protecting the Outside World from the Sea of Thieves, trying to keep the Sea of Thieves contained or keep someone/something from escaping.