The optical activity of composite films created by the photocatalytic reduction of silver or gold ions in TiO2 upon irradiation by UV light has up to now been discussed in terms of the formation and light-induced destruction of distinct nanoparticles molded inside the porous nanocrystalline film. We present results from classical light scattering calculations and a logical analysis of experimental observations to add detail to the mechanism. As opposed to large, solid metal nanoparticles, coatings and small particles in heterogeneous external dielectric environments account for observations such as the broad optical spectrum and multiwave-length photochromic responses. For some steps of the photochromic process, we propose that visible light permits an equilibrium promoting the growth of small metal features or suspended particles. We use a new expression for the restricted path length in our size-dependent broadening corrections of metal shells and discuss this briefly. We conclude by discussing the consequence of plasmon absorption in the proximity of the electronically active TiO2 surrounding matrix, leading to mass transfer and shape change of the metal and photochromic properties of the film.