The options work fine in default edit toolbar layout. Where the color tools are hidden in 3 dot option. The issues happens when we customize the toolbar and put these options in Group 1 near bold character and underline options. Please type something in the note before choosing the tools.
Please check the screenshot. If you choose a layout like this then the color buttons do not work.
Another issue regarding color tools: When we double click the color palette, the color disappears. So we can't use the same color on 2 words consecutively. I am referring to the color palette and not the "A" character. Also it is persistent across all the platforms not just android.