The only note color options available right now are: Random, Default color scheme (the same as "Rainbow"), Taneda color scheme, and Custom (you can only pick 1 color that will apply to all notes). The "Note Color" Override option will only apply to lessons that are set to use note heads instead of icons. If you want to apply the selected color for ALL Music Notes lessons (Chord Recognition, Note Sounds, Solfege, etc.), you need to set "Icon" to "Note Head Only" in Override as well (see screenshot 1).
Another way to customize the note colors is to make your own icon set in Media Library > Icon Sets. You don't have to actually use cartoon icons (or images of things) - you can just make oval-shaped icons in the colors you want to use, then attach your colored icons to the notes.
Alternatively you can edit the existing "BK Rainbow Notes" icon set and switch the icon images as needed, or you can use the other multicolored icon images (BK Smilies, BK Dog, BK Cat, etc.) for your personal icon set. When you double-click on a icon item (e.g., "C Active") the window that opens will show the directory where all icons used in LMs are stored, so you can pick the icon image you want to reuse from there.
For detailed notes about the Media Library > Icon screen, see: http://support.brillkids.com/hc/en-us/articles/204598634
In case you choose to make your own icon set or edit one of the existing icon sets, you just need to select that particular icon set through Override's "Icon" option.