I'm painting with the Wet Paint brushes, which use the Smudge engine. When I enable "Overlay Mode" so that it blends all layers, it literally blends ALL layers, including the layers above the one I'm painting on. This is kind of un-intuitive, since the expected behavior is to blend all layers BELOW the current working layer.

This issue becomes a problem when you have a top layer that has just the linework. On a layer below the linework layer, I will have a blockin layer, and then I'll make a new layer above the blockin layer (yet below the linework layer) to paint gradients using the wet paint brushes. What will end up happening is it will blend the linework layer (which is above both layers) and leave a trail of blurry black colors of the linework layer.

Is there a way to make it so the Overlay Mode blends only the colors BELOW the currently painting layer? Either that or is there a way to select a layer (in this case the linework layer) to be uneffected when painting with the Overlay Mode enabled?

As a practical solution, you could turn your lineart layer off (the eye icon) while you're using the wet brush. This seems to work.

I've resorted to that but that left me needing to adjust how I work. The work-around was to paint ANOTHER "blockin" layer, this one just for the areas that I want smudged. And now turn off the linework layer, enable Overlay mode, then do the smudge painting.

However.. this was just a work around and would definitely be much better if I could have control over the Overlay mode. As you can see, I was having to add another whole step to the process of getting edges smudged.

Actually, anyone who has ever used Paint Tool Sai should know exactly what I'm talking about. In Sai, the Watercolor brush blends/smudges all layers BELOW the current layer. This is why I thought it was so weird how in Krita, the smudge brush was smudging the layers below and above the current layer.

PS. - I think even Corel Painter works this way as well. I believe Corel has a button in the Layers palette that specifically enables a kind of "mix all layers" option. When you enable this is, it actually mixes all layers BELOW the current layer.