The desired behavior from a user perspective here is that they'd be able to use Static Switches in a decal master material to toggle different features and behaviors. In the above setup, if I set the Use Base Color ignore-switch to False, I would expect and want my decal to use only the DBuffer Normal blend mode.
I've attached a project with the materials and scene setup necessary to replicate the issue.
This behavior can also be seen using a similar setup with Material Attributes:
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-129570 in the post.