It is 'green', inheritance is restored. As the $Color entry is now not bolded, it is signalling that the 'green' value is now inherited from prototype 'A prototype'.
Because the prototype's own $Color is set locally, that blocks it inheriting the document's 'red' default. Another way to prove the point is to remove the prototype assignment from the current note.
To reset inheritance in action code, set a (null) value of ';' , thus:
$Color =;
This method is described further under the Actions & Rules section.
Remember, inheritance can occur without prototype involvement…