My onion seedlings look a lot like that, yellowish and ill. I started them indoors in Feb and planted them out last week. I pulled one of them up and the roots look strong. I’m going to leave them and see what happens and blame the poor growth on the cold.
For me they always look worse before they start looking good. They usually start looking good when at least some warmth comes up and blood meal is applied for the first time, and that would be minimum 2 weeks from transplanting.
Usually mine look kinda puny to the point I can hardly find them in the bed, and then miraculously at some point they turn and burn. They are starting to turn the corner now.
A couple years ago I got a hair-brained idea to grow leeks and wanted to get them in quickly, so I ordered seedlings. Sorriest looking things, but figured they might pull through…they didn’t…well maybe out of 50, 5 made it. I saw onion seedlings at Lowes and they looked pretty sorry, no leeks though, so I ordered online. Not something I’d do again.
They DO look sorry, but they’ve always grown well for me - until this stooopid year. I’ve always said onions can take any amount of freeze, but I guess not.