Question: Does settings.color.custom
false disable colour controls?
Answer: It doesn’t disable the color palette but does prevent the user from choosing a custom color.
{
"version": 1,
"settings": {
"color": {
"custom": false
},
"blocks": {
"core/paragraph": {
"color": {
"custom": true
}
}
}
}
}
Heading doesn’t allow custom color

Paragraph does

References
Global styles – theme.json