Max 4 colors, so do the Fade-Out yes will be cheating, think this was not able in a CGA computer.
BTW, you can use a filter for the layout to recude the colors to 4 and use the Fade-Out then the filter will transform the fade out using the 4 colors using dithering, that i thing there is another .FX called dithering.
But, as i said is not possible make a fade-out like that, only 4 colors.