The Nest is colorblind. It has no idea what color your wires are. The cutesy little Nest screen will show wire colors, but it's wild-guessing based on commonly used wire colors. In this example, the W wire might actually be brown, the G could be orange.
The wire colors on the display mean nothing.
There is no official color code for the
C wire, since it wasn't traditionally used in thermostats. You can use any color, as long as that wire isn't being used for something else.
The essential thing is that the
C wire connects to the 24V side of the transformer, on the terminal which is not the one the
R wire goes to.
Connecting C and R to the same terminal of the transformer would do nothing, and the Nest display would probably show C as not connected.
Whatever the Nest display is indicating about the "Blue" wire is irrelevant. It doesn't know or care what color you are using for the
C wire. Blue is not an official color for the
C wire, actually Blue and
B are commonly used to switch a heat pump from heat mode to cool mode. If you don't have a heat pump and the wire color is unused in your cable, steal it for
See also Nest's page.