You can use it for background tiles too! But, as of right now, it is also clamped to the HUD.
So like...if your HUD used blue and red and white, you COULD make a background tile that used the fourth subpal, to make a background tile blue and red and white. If you CHANGE it to green and brown and yellow, your HUD will change to green and brown and yellow.
We originally had that subpal for flowerbeds in Mystic Searches, however since one of the colors ended up being variable depending on the magic you selected, it made the flowers variable, which led to weirdness, so we just relegated it to the HUD. You don't have to though.