With Logic1 I used the LED colour just for fun. In the game industry it seems there is more effort put in to setting up your avatar than any other component of the game, so there is prior art for that.
When we got our first Saleae analyser almost the first thing we did was cover the LED with blue tack. The pulsing LED was driving us crazy! So glad that’s not a feature of Logic2.
Showing status, especially connect status, sound pretty sane to me. Being able to change the colour for individual devices so they can be quickly identified where multiple devices are connected could be really helpful, but maybe that’s not a common as it should be?