I have some questions about these movies.

And don't know about the dots (but if I had to make a guess I'd say it's a kind of ranking system) but it just isn't true that the bad guys do always have white hair. Look at this movie: the baddies do have black hair.

The thing is, asians all have black hair until they turn so old that it becomes grey/white. So you don't really have a choice as an director. And since we are talking about (old) kung fu movies where the older guys tend to be even more dangerous (due to their knowledge and experience), in many cases the bad guy will have white hair as in white hair = old = dangerous.

i read the head brands were for each thing the monks give up like sex and meat

For the past 2 weeks I have been reading up on a bunch of things related to kung fu... Dunno why it just sparked my interest. But there is a historical figure called Pei Mei (you might recognize the name from Kill Bill 2/Lo Lieh Movies) which translates into "White Eyebrowed Taoist" And he was a martial artist who betrayed his brothers... Hence being evil.
Also, the other guy's answer makes sense too... Being older with more experience.
That is my guess and it seems to fit, atleast in my mind

No matter how good our kung-fu is, it will never defeat guns.

I would say the older, wiser white haired types are usually good guys since many orientals have a great respect for elders. I don't know what they did in the 80's
but movies made in China tend to be this way.
The dots are burned in their heads by lumps of incense as a sign of giving over their bodies to Buddha.