I looked at the code some more, because I remembered including the current blending mode in some way when I created the initial version of the Lightness mode for the smudge engine, and it is in there. As it currently stands, the current blending mode is used only for how the chosen paint color is blended into the existing paint (based on color rate). It does not affect how existing colors on the canvas are blended together.
I could potentially update it to make the smudge mixing use the blending mode too, but there are a few things that complicate it. First thing is I would have to figure out how to handle the Smear Alpha option, because right now that option is implemented by changing the blending mode it uses.
Second thing is that if anyone has made any smudge brushes that use a different blending mode than Normal (e.g. Erase), those brushes would probably suddenly behave differently if the smudge mixing were changed to use the different blending mode. Because of that, I would have to add an option to use the blending mode for smudging or not. Not too big a deal, but it does make the smudge engine just a bit more complicated/confusing. I’m also curious if it would make sense to just allow the two blending stages to have any blending mode independent of each other, so there would be two separate blending mode options in the brush editor.
I’ll think about these things, and maybe if I find some free time do some testing to see if it could work. Because if we can get some more realistic mixing brushes, I think that would be pretty cool.