Hi Sueellen, It discoloured because it's not UV stable and will degrade with exposure to sunlight. If used externally it needs to be plastered over or painted with an acrylic paint. In relation to the original query I think decorators caulk is the best product for sealing small gaps internally.
Carpenter is correct in my opinion. I used it externally without plastering over and it provided hours of entertainment for all the birds picking it off !