Is blending of colour lights a linear system? Can we consider recombination process of different light colors a linear system/phenomenon? Like, when you shed two different light sources for example, a blue light and a yellow light on a surface or recombine them through a prism , the resultant light would be green which has a different frequency that the inputs. Producing a new frequency component other than what were in input (Is this assumption correct?) This is contrary to definition of linear systems I assume. So is this process linear, if not, how is it non-linear, I mean the whats the physics?
I've wondered this question from time to time and I know I probably have some wrong assumption some where. I would appreciate if someone clarify things for me or point out my wrong supposition(s).
Your mistake is that you are describing subtractive color mixing, not applicable in this scenario.

If you shed two lights onto a diffuse surface that does not absorb any light, and collect all the light diffusely reflected, the sum will be an additive mixture of the two. Incoherent (non-laser) light can be thought of as noise that has some electromagnetic spectral power distribution. From the signal processing point of view, long-time average power spectra of independent noise signals mix additively when they are summed