A sense of urgency

In Sonic 1 and Sonic 2, the yellow HUD text blinks red when you have zero rings, and when you're running out of time to complete the level.

This works by simply switching the HUD sprites' palette back and forth between lines 0 and 1. The layouts for Sonic's palette and the enemy palette were specifically designed so the yellow colors line up perfectly with the red colors.

In Sonic 3, however, due to the contract between cutscene Knuckles and the HUD, the yellow color used by the HUD is no longer aligned with the red, because it's aligned with Knuckles' sock color instead.

Unfortunately, this means the original blinking effect is no longer possible. The compromise is to make the HUD sprites themselves blink in and out of existence rather than change their color.

Other sprites which took advantage of the red/yellow palette switch, such as red and yellow springs, had their graphics split into two copies, one for each palette. This actually allowed yellow springs to take advantage of all three shades of yellow, and red springs to use the shades of orange for some smoother lighting.

In particular, the star post was redesigned to only use Sonic's palette, even though they could've easily made it use the original yellow colors all the same. I guess they thought it looked better this way.

  

I think it looks better too.