Set color should apply a tint to the sprite, not a block color. It might be possible that you are not using the correct system expression for rgb.
If you make a new temporary project and then import the sprite and change the color does the problem still persist?
yep, this is how i made the event:
player on collision with EnemyProjectile >>>
Set effect "SetColor" parameter 0 to 20
Set effect "SetColor" parameter 1 to 255
Set effect "SetColor" parameter 2 to 20
player Enable effect "SetColor"
Wait 0.1 seconds
player Disable effect "SetColor"