Yup, even works on white bodied ponies like TAF Yum Yum. You can even dunk pony's with multicolored manes, like say Sea Breeze, Party Time, or Steamer, and the dye will only color the faded pink/white part of the mane; it won't recolor any part of the mane except white/faded pink.
You'll only have to be careful repinking flocked ponies. The 2nd gen ones. I repinked a SS Wind Whistler and the dye didn't color or stain her flocking, but it did a little on a Twilight I had, so I think the difference in flocking played a part.
What you can do with SS ponies, is wet your fingers on one hand, then pour a few crystals onto your fingers and smush them. Then run your dye fingers through the hair closest to the plugline, the part most likely to get wet, then just dunking the rest of the mane in normally. This keeps the flocking near the plugline clear and safe from staining.
I suppose I should make a walkthrough with pics next time I repink. Showing is easier than telling.
EDIT: Made a quick guide with pics.
Okay, first you need a sacrific- I mean, 'volunteer' to be repinked. I choose a baity Rosedust since she had nasty faded hair.
Notice she looks 'too pink'? Conditioning her hair will soften it back a bit and she'll be perfect once she dries!
Easy. Fast. Safe. I think the longest step was waiting for the tap water to turn warm. lol
Rose Dust and Lil Flitter need to dry overnight, but I can take after pics tomorrow. You can already see their hair is pinked. (b'.')b