So while I was looking into another problematic blend (symmetric surfaces that lead to asymmetric blend surface) I think I found the cause of the blend problems, or at least some of them.
When I invoke the surface blend command and choose for instance g2 continuity for both edges, that doesn't necessarily mean that under "advanced" the start and end continuities for the edges are set accordingly.
That was the case in example 01 (and the other problem I was working on): both edges were set to curvature and nevertheless end 1 was set to position (without me ever touching it).
So I don't know if this is a problem of my VSR preferences or, if not,whatever causes this behavior.And I don't know if this was the cause of all strange blend results I have gotten so far, but the least I can say this explains a good part of my surface blend problems.
Needless to say You should control the inconsistent behavior of the start-/endpoint continuity settings.
I think it is obvious these should only differ from the edge settings if they are actively changed by the user.
I just checked, the default for the Start and End continuity is "Tangency". If you change that, these changes are remembered. So you either changed it once and forgot about it, or we got a bug here I cannot reproduce so far.
Another thing you should know: Regardless what you set for Start and End, the used quality can't be higher than the general Blend quality for that input edge. Reason for that is that you would get unequally distributed control points otherwise (I hope this is understandable?).
So the question is: Should the settings for Start and End *not* be remembered, and always be set to flow, so that they always correspond to the Blend quality used, if the user is not manually changing it? Would avoid users are running into the same problem as you did, but might be annoying to be forced to reset it e.g. to Position, if you use a Start and End quality lower than the general Blend quality more often.
Another possibility could be a letter at the handles (P, T, C, F) to indicate the quality for Start and End.
I would like to avoid introducing another state in the UI like you suggested, as I'm afraid it is not too clear to every user what it is about.