Photoshop: Stroke blend mode should apply to layer, not cut through it.

Any news on this issue?

I find the knock-out effect extremely useful, so blending as an option would be great, but not replacing the current behavior entirely.

For your purposes, an inner glow with 100% choke works the way you're wanting strokes to work, UNLESS you have to do a gradient stroke--then you're gonna have to get creative. 🙂

Outer strokes don't cut through the layer, so they would affect whatever's behind the layer just like it does right now.
Center stroke would half affect the layer and half what's behind it.

As much of a pain this would be for legacy support and as much I hate adding bloat and extra options to apps... I'd really like this, too.

Are we only talking about strokes that are positioned Inner and Center? Would Outer strokes be the same?

That would be great! It would allow me to create a button and not worry about the stroke color. I could just make it gray/black, set blend mode, opacity and then if I adjust the color of that button the stroke will change with it.

Well, we can't change it across the board without breaking existing files.
But perhaps an option could be added.