As for fixing him I think it quite easy. All you need to do is think about the heroes theme.
Chameleons don’t change the color of its backgroand. it changes its own color.
Simply switch chameleons Debuff in to a buff for your own team. Switch your own heroes to the color they are strong against rather than those of the enemy and weaken his attack and crit buff to balance him.
Imagine this new version at flank on defense. Oh you stacked yellow against my purple tank and failed to kill it? Well now that tank is purple… You brought some green heroes to kill my Richard? Well richard is red now… It might still bite you if timed poorly but at least it could have some applications.
Imagine this hero on offense. You pour tiles from your stack in to the enemy and have none left but you managed to load your chameleon. now you have a board that does have tiles you can use.
Now that is a hero people can get excited about.
The current version to me is in the same group as guardian kong,owl , mok-arr, atomos… Never worth ascending.