Sorry for the delay, I'm currently on vacation.
Indeed, this behavior is by design. You need to press ENTER to update the widget with the color entered in the input field.
This said, I agree that it could be more intuitive if the widget would update automatically once you type a valid HEX or RGB color. I'll need to discuss this internally but should have a workaround for it early next week (most probably a new configuration option will control this behavior).
Join us on our journey to create the world's most complete HTML 5 UI Framework - download Kendo UI