The cancel button sets the color value to the one that was given when the page initially loaded.
So basically, if you enter a color, open the picker and click cancel, the color will be reverted to the first color.

Steps to reproduce the bug:

1. start creating a new worklogtype
2. select a color using the color picker ( do not save yet )
3. reopen the color picker
4. click cancel
5. The color field is now empty