Not exactly... The Nyquist frequency is half of the sampling rate of a digital signal. There isn't really any sampling going on here. The CGA does generate a signal with a pixel rate of 14.318MHz, so the Nyquist frequency of that is 7.16MHz. But that discreteness it not directly related to the color carrier frequency of 3.58MHz - inside a (sufficiently old) composite monitor, all the processing is analog.
As for whether this method of generating colour was supported by IBM - as far as I can tell, it wasn't. There is no mention of it in IBM documentation, and the artifact colours in later IBM composite machines (in particular the PCjr) were different. That didn't stop games programmers from using it though (at least in the classic and reasonably consistent 16 colour variant).
As for whether this method of generating colour was supported by IBM - as far as I can tell, it wasn't. There is no mention of it in IBM documentation, and the artifact colours in later IBM composite machines (in particular the PCjr) were different. That didn't stop games programmers from using it though (at least in the classic and reasonably consistent 16 colour variant).