I have used this effect in my Sky Scraper 2115 project. In 160A mode it behaves very much like Antic 4 on Atari 8 bit. 10 colors per character, plus you can use 7 other palettes to get more colors.
I also did this in 320B mode. This is a 320 pixel res mode which allows 3 colors plus BG per palette. To get all the colors you have to turn on Kangaroo mode but I used this to get 10 colors on the title screen.
Using this in 160B mode (12 colors plus BG) will get 91 colors. Again, likely only of use in title screens and static displays.