A palette is a set of colors including at least one color.
When looking at color theory, most designs have 1, 2, 3 or 4 colors.
Because of this, the first 4 colors in a palette will be treated in a special way and called:
If you look at the preset parameters and overlays which can make use of palettes, in those situations you pick one of these 4 colors or a random color.
Changing HSV values means it gets updated in the player immediately.