Assuming there's a practical limit to the number of sorting categories that rules out separation by color and function, I'd much rather have them separated by function as shown.

Is it easier to find the functional piece you need in a bin full of same-colored pieces, or to find the color you need in a bin full of same-function pieces? For me, the latter would be far faster/easier.

That said, I do agree that individual pieces labeled by function and color is probably ideal for sale to buyers looking for a single elusive piece (or groups of pieces).

I had mine separated out by type (function) as you describe, and unsorted by color. That worked, and would continue to do so until the collection reached a scale far greater than anything I ever contemplated.

You're right about the need for individual separation when selling parts. Bricklink does that, so that people in need of, say, exactly four orange cheese wedges, can go and buy them. That seems to be the preferred style for most builders, since it makes possible a mapping from a parts list to a purchase order; there are other styles in use, including bulk sale by mass or approximate quantity, but the individual price for a given part is much lower when sold in bulk than alone. So if it can be made feasible to automatically, or mostly automatically, sort down to the individual part level by type and color, that'll show the best return on investment per part at the point of sale.

(Update: based on jacquesm's comments elsethread, I don't suppose I can any longer recommend selling on Bricklink. But I'd imagine the pricing effects I describe are similar elsewhere.)

If you have a bin of different Lego pieces of the same color, you have to carefully look for the piece you want.

If you have a bin of the same pieces in various color, you just pick the color you want.

I suspect this is our evolutionary trained neural net looking for fruits in vegetation that helps us here.

It makes me wonder if there are species (that have full color vision) that are better at the opposite. Is shape discrimination simply harder than color discrimination, or is it related to our evolutionary history as you posit?

I would say color discrimination is easier because it's basically 1-dimensional. In the best case you could do it with a resolution of a single photoreceptor. If you account for ambient lighting, shadows, etc you still just have a 2-dimensional task.

Shape discrimination is a 3-dimensional task. In the worst case you need to change your point-of-view or the orientation of the object.

Adding color sorting is fairly easy, the only hard to distinguish colors are the grays, especially old and new gray.

I think this is more proof of concept. You could probably easily add that sort criteria yourself.