Tip: Take advantage of easy to install Patches in your hack. The No More Sprite Tile Limits or SA-1 patches should be considered if you're encountering glitches where Mario and/or sprites are turning invisible.
Quick question, when I activate an overworld event for the first time, the color palettes of everything sorta freak out and go black eventually. They fix themselves if I enter and exit a level again. Only thing I can think of off the top of my head is the fact that this is my first time using an HDMA gradient in the overworld. Any thoughts?
Sounds like you're using Palettes 0-3 on your overworld. Those palettes are used for the path fade effect and shouldn't be used unless you disable the effect. You can disable it by going to Overworld > Extra Options and then check "Disable event path fade effect".