I know nothing about that game, but as linked above, I have experimented with this technique. Nintendo were right in not allowing it, as doing this on a GBC and above looks like a proper flickering mess. The LCD is fast enough to respond to change each frame, meaning that instead of seeing the average of the two shades you're aswitching between, you now see a 30 Hz flicker.
However, Nintendo may have had more immediate concerns, namely with the Super Gameboy. First off switching colors on each frame on a CRT TV gives you annoying flicker, just like on a fast LCD.
Moreover, the SGB works by copying data generated by a Gameboy CPU in the cartridge, into SNES video RAM. However, as far as I'm aware, the SNES and GB CPUs are not running in sync. Instead, I believe the data is double or triple buffered, so one buffer is displayed while another one is being filled up.
However, the almost 60 Hz generated by the GB CPU might not always line up with the almost 60 Hz. So every once in a while, a frame might be skipped or duplicated. Instead of getting an even flicker, you get flashes of darker or lighter color when the same pixel is drawn with the same color for two frames in a row.
Even worse, is what (I believe) happens on a PAL SGB, where the SNES side of things generates video at 50 Hz and the GB side of things still at ~60 Hz. Now duplication of blinking frames will happen all the time you will get a truly flickering mess.
If anyone is able to try my gradient ROM in the post linked above on a PAL SGB, please do so and report exactly how much of a flickering mess it becomes.