I thought this might be like the ZX spectrum, but that covers each 8x8 block with a foreground and background colour; "sprites" are then bitmaps over that. This does say two colours per pixel, which is confusing.
You set up a palette of 16 colours, then write 0-15 to the coordinates where you want to set a pixel, but you can also choose between an overlapping foreground and background layer (colour 0 on the foreground layer is transparent).
I guess it's no more weird than some hardware designs from the 80's...
I made a fantasy console with 3x3 pixel cells defined in 16 bits to do any two of 16 colours in the cell
4 bits : color A
4 bits : color B
8 bits : select A or B for the first 8 pixels of the cell
The last Pixel is always color A. You can independently change all pixels in the cell because changing the last pixel on its own can be done by swapping A and B and inverting the second byte.
In hindsight I don't think there was much advantage to the last bit being the odd one out. The code for setting individual pixels in a cell was pretty custom anyway. If I were to do it again, I'd place the color A pixel in the center.
And I do find myself working on a memory constrained device again, so perhaps I'll be giving it a go.
