It’s the Old Blue xkit extension.
Tumblr did something on the backend to change out palettes work which unfortunately caused a conflict with that extension.
About all you can do atm is disable the extension. The tumblr palette Low Contrast Classic is the closest thing at the moment.
Huh, I’m using the new xkit though? I really don’t want to disable it, I can’t use tumblr without it at all. :/
Edit: Ah, now I know what you mean. Thank you, I’ve disabled it, now it’s working again.
Yeah, you don’t need to disable xkit, just the xkit extension ‘Old Blue’.

