So, when you breed two pets, how does the game calculate the base/marking colors? Is it just the average of the two parents' colors in each slot? Is there a color wheel? Something else? Thanks in advance for your help!

see this for more in-depth examples

but basically, each colour has an R, G, and B value, sylesti colour inheritance treats them the way it treats stats
So parent A has R001, G100, B010 (a dark green) and parent B has R003, G200, B011 (a medium green), offspring could have an R between 001 and 003, G between 100 and 200, and B that's either 10 or 11

Thanks so much for that link, it's incredibly fascinating and useful!