Intentional for ‘full blocks’ to not allow (except for leaves and see-through blocks like glass/thorns) grass under them. When you place the block the grass will be removed, if you then chisel and expose soil where the grass used to be, you can plant grass into that soil again.
Texture-blends have always ignored square/bevel blocks due to limitations in the blending system that are very unlikely to ever be resolved, at most I would change to have it ‘block’ the blend rather than just letting them go through so in the OP first screenshot the dirt blend would be prevented, but that change would screw up blending in other cases so not an easy decision.