<palette-mix()> with angle brackets around it is used in the definition of font-palette's value, and I take the angle brackets and URL to mean it's a type, no the palette-mix() function itself.
I would like there to be a linkable definition of the function, similar to for color-mix():
https://drafts.csswg.org/css-fonts-4/#funcdef-palette-mix (does not exist)
https://drafts.csswg.org/css-color-5/#funcdef-color-mix (exists)
I suspect that it did work in @drott's #9282, but @cdoublev's #9381 removed it as duplicate. To avoid flipping back and forth, I'm filing an issue instead of sending a PR.