Back in the day, pre 2000s, the color of the jacket indicated which clearing firm you used. So when you made a trade, it was known who and where to send the trade details to (clearing bank & trader badge).
Now just the badge is important to help identify who you're trading with, but the system automatically knows who clears where based on the badge, so the color isn't as important anymore.
Also helps for identifying people in the crowd, which is important for communication