Thanks for the detailed explanation of where the problem arises - I had not been testing with a specific (i.e. edited repeat).
I have found the issue - at line c. 536 of administrator/com_jevents/controllers/icalrepeat.php you'll see
$data["X-COLOR"] = $jinput->get("color", "");
change it to
$data["X-COLOR"] = $jinput->get("color", "", 'HTML');
The fix will be in the next release of JEvents