It depends on your goal; it may be simplest to just have 2 sprites next to each other using 2 different sprite palettes, each of 3 colours plus transparency. On the hardware, you should theoretically be able to flicker between 2 sprite palettes each frame, to simulate more colours.  So using that flicker must be ok, but that’s very limited on the DMG screen & strictly speaking you’d need to match the GB & LCD refresh rate.

"invisible" is not a color as far as the jam rules is concerned, so you can have 4 colors plus alpha