Blending just reduces the difference component of the FM signal to reduce the noise introduced by the amplitude-modulated subcarrier that carries that information. In other words, it reduces stereo separation.What is soft muting and how is it different than blending?
I think it may be easiest to understand muting in terms of how hi-fi equipment used to handle it: the tuner simply ignores signals whose strength falls below a certain level. The hiss that you would hear between stations was also blanked out. That kind of muting was an all-or-nothing proposition. Soft muting reduces the audio level of anything below a certain level, but doesn't eliminate it altogether. So you hear the hiss between stations, but at a lower volume. This seems to frustrate DXers in a couple of ways. First, because most radios with this feature don't let you turn it off. Then, when listening to a weak signal, instead of the volume being somewhat proportional to the signal strength on weak signals, the volume suddenly drops off.
Muting should be treated as a personal preference, and should be something that can be disabled. I always left muting turned off on hi-fi equipment that I had. That was back when the FM dial wasn't jammed full of low-power stuff the way it is now. The hi-fi tuners I use now don't have muting; my DSP-based radios do have soft muting, but the newer ones let you turn it off.