Hi,
any idea why the material turns on greyscale when I try to modify it?
If I double-click on a material to adjust the colour, it turns automatically grey
I would guess you have painted the group/component rather than the faces of the geometry themselves.
No, it happens all the time even if I create a new surface. When I double-click to edit the material, if I try to move the bar to have a lighter or darker version of the material, it goes straight to black/grey
Share the .skp file so we can see what you’ve got.
Actually the material named as “Niraj_Skin” is grey RGB [153,153,153]. So I will not surprise if it turns as grey if it is grey. 
Things are behaving normally on that specific file for me, it has brought through the new grey colours that have been set.
Does it happen when you create a new colour paint it and then edit it again?
Do you know what operating system version you have on your Mac?
Can you please try to modify any other colour with the wheel? that colour grey was originally brownish.
I’m on BigSur