This menu lets you import master palettes. Each master palette also has its own set of UI colors.

Only one master palette can be used at a time. The ability to import multiple palettes into your game exists so that you can switch to a different palette using the loadpalette script command, such as for some self-contained section of the game like a sequence of backdrops.

The active editing palette is the master palette being used for the current editing session; this setting is not saved.

You can replace the selected palette, or add a new one by pressing Right at the last palette.

Master palettes can be imported from:
-a 256-color .BMP file of any size
 (or even a 16-color .BMPs), in which  case the palette of the image is
 used and the pixels ignored
-a 16x16 24/32-bit color .BMP where
 each pixel is a color (the alpha
 channel is ignored)
-or the old uneditable .MAS format.

The Export option on this menu saves a palette as a 16x16 24-bit .BMP.

Each color used as a UI color is outlined when selecting a relevant menu option.

When a master palette is imported, its UI colors are automatically selected to be as similar as possible to the UI colors of the active editing palette.
"Nearest-match active palette's UI colors" lets you repeat this process, to copy changes from one palette to another.

"Copy active palette's UI data" basically copy-pastes UI color indices between palettes without remapping, for when you want to do something like create a darkened version of a palette and affect the user interface as well.