Given the following primary ruleset saved as phpcs.xml.dist:
<?xml version="1.0"?>
<ruleset name="Test">
    <file>.</file>
    <arg name="colors"/>
    <rule ref="PSR12"/>
</ruleset>... and this secondary ruleset saved as phpcs.xml:
<?xml version="1.0"?>
<ruleset name="Test">
    <rule ref="phpcs.xml.dist"/>
    <arg name="no-colors"/>
</ruleset>The no-colors setting has no effect.
Overruling the setting from the command-line using phpcs --no-colors does work.