Your pictures are too close up and don't show how one piece of the back yard fits with another. The main question I had after reviewing your post is, where is all the water supposed to go? In that hole? Is that going to be a french drain? I don't have enough information to summarize the project, but my suspicion is that this project is not well thought out and you're on a path to overkill... making the project bigger (and more expensive) than it could otherwise be. With a drainage issue, what must be understood is the PATH that the water will take which clearly shows that it can exit your property without obstruction. I'm guessing that instead of solving the problem, you're making a "bowl" further away from the house to put the water in. For most rain events it will probably work (but not necessarily without problems.) But when that torrential, freak downpour occurs, the water will fill up the bowl and come back to you. Once the path of the water flow is identified and a strategy is created to direct the water, it may turn out that you can do it without a wall, or with a very low wall. Please put some photos (not close up) on the thread that clearly illustrate the path of water flow until it exits your property. Since it looks like water is entering at the back of the lot, I'm guessing it's leaving at the front. That's where photos should start. Take pictures that illustrate the grade.

I don't see how this small an area can have any effect on the functioning of the leach field.

It can work. You can use the field tiles directly above and below the mosaic border. Or if you think that transition to be an akward one, you can somewhat isolate the mosaic from the field tiles with a run of listello/border tiles. Realize that due to the tight spacing of the mosaic, it'll require unsanded grout and a bit of elbow grease on the part of the installer to get some grout into those tight joints. If the spacing on your field tiles is 1/8" or greater, you'll use sanded grout there. If you choose two different colors of grout, one for the mosaic and another for the field, then the listello may make sense. Don't forget the thickness of the field tile when compared to the thickness of the mosaic. If the mosaic is not as thick as the field, the mosaic can be padded out with an additional thickness of thinset. If the mosaic is thicker than the field tiles, then a listello border can be used to disguise the transition from one thickness to another. Mongo

Thanks for the suggestion. I'm not sure about going with a grey-grey since it's such a large room and we're eventually going with more of a grey theme in the family room which is more modern. Would a lighter color work better? This is a color I used in years ago in my old house: Behr White Clay: https://www.behr.com/consumer/ColorDetailView/730C-1. It's more of a beige than a greige. The last time I tried to paint a room a light grey, it ended up looking baby room light blue, so I'm hesitant to try another one. Maybe Horizon from BM would work? https://www.benjaminmoore.com/en-us/color-overview/find-your-color/color/1478/horizon?color=1478. But I've seen posts online that it turns baby room blue.