How come all the color slots are the same as the default?
That's because Mr.Game&Watch is...A little different when it comes to how his costumes work.
He technically has only a single costume model, but his recolours use alternate colour palletes that are stored in that one costume. StarWaffle's Paper Mario model somehow makes use of the way Mr.Game&Watch's costumes work for its recolours.
And if something is .rel ported over him, it'll just make all 6 slots use the same model with the exact same textures, as it's not drawing from the palettes that Mr.G&W normally has access to.
The same thing happens when you replace the 2D man's textures - they overtake every slot.
...At least, that's my understanding of it .__.'