The Planet Color Reset is one of the planet coloring tools available from your spaceship. Using this on a planet you've painted will reset the atmosphere, ocean, and land colors to their original state. So in reality, it is more of a planet uncoloring tool. Using this tool on a planet will not affect any terrasculpting tools you may have used on the planet. This item has to be found like the other coloring tools.
Interestingly, using this tool on the player's homeworld will turn its air and oceans blue, even if they were a different color before.