Mine works fine.

Do you see the colors change in the controls area, but not reflected in playback or render? If so, it may have something to do with your track settings -- is it in anything else than Alpha or 3D Alpha, such as Add or other mode?

And/or it could also be some conflicting FX you are using on that event that could be neutralizing or washing out the color. I.e. you have Gain way up and Saturation way down, etc.

All that said, I've only dabbled with Flash transition, so the above are just some hopeful guesses here :)