Change the button target image alpha

The problem with your script is that you're creating a new variable ColorBlock named "color", then assigning a copy (not a reference!) of the button's colorblock to this new variable, then changing this new variable. You're not actually changing the color of the button at all.

Try instead

 for (int i = 0; i<= (children-1); i++)
 {
 // Find the button, assign it to a variable so we don't have to do this again for every thing we do to the button
 Button but = this.transform.GetChild(i).GetComponent<Button>();
 
 // Create a new alpha
 float newAlpha = 40f;
 // Change the color of the button
 but.color = new Color(but.color.r, but.color.g, but.color.b, newAlpha); // Here we just set a new alpha and use the current colors of the button
 
 but.interactable = false;
 }

Note: Just setting a button uninteractable should usually be enough to change the Alpha setting if you have the button's colors set up correctly in the Inspector.