The bug
As of snapshot 17w47a, it's impossible to craft a lime or a magenta banner. The crafting table outputs you a single piece of lime or magenta wool instead.
MC-122350
Crafting a lime or magenta banner makes wool instead
Resolved
Fixed
7
Confirmed
banner, crafting-recipe
Minecraft 17w47a, Minecraft 17w47b
Minecraft 17w48a
Retrieved
Confirmed. That is hilarious, haha.
The recipe files are to blame here, explicitly providing wool instead of banners.