The main reasons to use the color palette are to avoid setting the same color over and over again and to have better control over the transitions.
So when you need to use a specific color (for example a nice sky blue) on multiple fixtures in multiple grids, it's a good idea to create a color in the color palette. Each time you assign a color palette color to a hue, saturation or intensity attribute, it becomes linked to it. This way, you can quickly adjust the color at only one place, in the color palette. Without the color palette, you'd need to look everywhere in your project to find the color and modify it multiple times.
For the transitions, the color palette eases doing color transitions by going through the color wheel instead of only around it. It works by modifying the saturation and the hue at the same time. This is the equivalent of doing a transition in the RGB color model. The color palette also lets you avoid certain colors during a transition, for example, going around pink.