Thanks for raising this. It is the correct behaviour. That setting refers to the reported CSS values Microthemer shows when you hover over a color property icon (e.g. font color). The color value that currently applies to an element will be shown as a hex value e.g. #000 rather than rgb(0, 0, 0). This is useful if you recognise colors in hex format. However, the CSS values in the stylesheet will always be in the RGB/A format. There might be technical reason for that. I’m having a hard time trying to recall if I’m completely honest!
I hope my explanation makes sense. Please let me know if you have any other questions.