Can't do something in V5 that I could easily do in V3

[Dragonhome]

In my previous version of PaintShop (X3), out of the box, I was able to do the following:

Image - Decrease Color - 16 Color - And then in the Materials window, I was able to select a foreground & background color from the 16 colors and using the color replacement tool, replace one for the other and still have only the 16 colors available in the materials window.

In Paint Shop V5, if I do the above steps, as soon as I start using the replacement tool, the materials window goes back to showing RGB – 16 Bits/Channel.

I need to use this tool the way it was before in version X3. I assume it is a setting or something that I need to change, but I can’t figure it out.

HELP!