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That seems to be more-or-less exactly what happened. Apparently plenty of languages don't bother distinguishing blue and green as separate colors, and Proto-Celtic was one of them. (I guess kind of like how we describe "sky blue" and "navy blue" as both "blue", even though they're pretty distinct colors.)
In fact, some languages distinguish between «sky blue» and «navy blue» as separate colours. Funnily, in many languages this distinction is done only for «red» (in English «pink» is not «light red», it's just «pink»).
So it's not strange that Proto-Celtic had its own opinion about colours.