I think I understand what you are saying. I guess, to me, it would make more intuitive sense for these melee damage buffs to apply to your 'final' melee damage, but that's just my subjective opinion, lol.
That's true, I think this method simply makes the calculation for damage easier and makes it simpler to balance melee damage increases when they have diminishing returns when you already have really high weapon damage. But if I'm getting what you're saying, the final melee damage isn't what you think it is. Also apologies for the long ass reply below, this topic is kind of complex and the thorough explanation is needed to communicate it properly.
The "final" melee damage that shows up on when hovering weapon stats will account for base melee damage affected by all weapon damage and melee damage increases. The reason why melee damage increases from colossus and Yamato's ability don't change the number on the tooltip is because conditional damage increases don't change this number.
I can visualize this to make it more clear how this applies in game. An item like restorative shot gives 6% weapon damage and will give an extra 7% weapon damage if no other orange items are bought, which will increase melee damage too. But since it isn't explicitly written as melee damage, I won't note that in the table below. There are no other conditional effects for damage increases, so it fills out these criteria.
| Restorative shot | Weapon Damage | Melee Damage |
| Unconditional | YES | NO |
| Conditional | NO | NO |
It's clear to tell that buying and selling restorative shot will update the number that shows up for melee damage.
On the other hand, an item like battle vest only provides weapon damage in the condition of being above 65% health. Since it is a green item, it does not contribute to the orange item investment and will not give any unconditional source of damage.
| Battle vest | Weapon Damage | Melee Damage |
| Unconditional | NO | NO |
| Conditional | YES | NO |
Buying battle vest will not change the number that appears for melee damage. But if you test the damage with the condition in effect vs not in effect (or without the item) it will change the damage in practice. This item is a unique example of an item that increases melee damage without updating the tooltip number or even increasing melee damage specifically. And this item proves that the tooltip number will ignore conditional weapon damage increases as well as conditional melee damage increases.
Colossus is an interesting item that will increase weapon damage unconditionally and increase melee damage conditionally (by activating it).
| Colossus | Weapon Damage | Melee Damage |
| Unconditional | YES | NO |
| Conditional | NO | YES |
This is all consistent with what you found before. The unconditional weapon damage increase for the item is reflected in the tooltip number for melee damage, but the conditional melee damage part will only be apparent by manually testing the damage.
I won't make any more tables, but some other examples of items that only give unconditional melee damage and no other increases are melee lifesteal, lifestrike, and spirit snatch. And their increases will still reflect in the tooltip number. Basically since the sources of melee you tested all give conditional damage, it seems like generally melee damage increases aren't reflected in the tooltip number. But this has nothing to do with it being melee damage and all to do with being conditional versus unconditional.
Another fun thing is that melee charge and crushing fists have the unique passive component of giving 25% bonus melee damage, which will actually be a 1.25x multiplier on top of all the damage increases being applied before hand. So this one damage increase stat actually becomes more valuable the more damage increases you have. This stat and resist shreds are the best ways to amplify your melee damage if you already have a lot of percent increases to damage.
