Riddle me this, a sprite malfunction

What is happening is that the sprites you imported use at least one of the last four colors of the palette. Only the first 12 colors are imported into battle, the rest of the space in the RAM that would normally go to those colors goes instead to static values used for the palettes of the additional sprites on the screen, such as the little pointy finger, damage and healing numerals, etc... Bottom line, characters used in battle can only use the first 12 colors in the palette.

That being said, I am looking into making a patch that would allow all 16 colors to be used, but I wouldn't expect anything soon, getting into all of the display stuff is making my head spin a little and is a totally different ball game than what I have been working on thus far. For the time being, at least, you need to edit your custom characters.