When you untick "Show Sequence Label Color" in the timeline menu, it does nothing. If you set a label colour in the timeline with this off, it will still show the Timeline label colour.

Sorry about this. I think it must have been a lag in updating. Today I did the same thing and it switched, with about a 1 second delay, but perhaps something was going on with my system yesterday that meant it didn’t update.

It’s now functioning normally.

Hi ​@Editosaurus 

Welcome back to the Premiere forums! Appreciate you including your setup and those details about Sequence Color Labels in v26.3.2. We ran some initial testing to see if it was functioning as expected, and so far, we could not recreate this issue, perhaps we’re missing something here. 

Just to make sure on the same page, ‘Show Sequence Label Color’ from the wrench icon menu on the sequence affects whether you can see the square color label to the left of each sequence name. You can see on the Helpx the example.

The sequence label color should match between sequence panel and what was set in Project panel. Do you mean there’s a mismatch of color there maybe?

It would be really helpful to show us a screen recording of your issue so we can see exactly what might be going on, full screen so we can see project and timeline preferably.

“when I go “Reveal in Project” the project clip has a different color label to the clip in the timeline.”
Can you show us what’s happening with that, as well? You can set a label for a clip in the project panel as say Blue, and then inside a sequence right click that same clip to set it as say Magenta and they’re independent. Wondering if you mean there’s a mismatch on situation like that?

Hope to help!
Katie