final long post to this thread from me
Okay, I finally figured out what is causing this, and Medley; you were half right. It does work your way for sure, but not because photoshop does weird things with the color layer, it is because of how photoshop creates zoomed versions of your image
This is what i found:
- When you apply a graphic pen with pure black and white as your colors it essentially turns your image into a 2bit image (black or white).
- the color blending mode does not have any effect on pure black or white pixels so photoshop doesn't actually apply any color to any of the pixels in the image (what you see after you flatten your image)
- when zoomed at anything other than 100% photoshop has to take some 'creative liberties' to create a preview that looks decent, and to do this it is creating artificial grey pixels that dont exist, which causes the 'appearance' of a functioning color layer. (what you see before you flatten your image)
- when you merge the layers, it processes the image without these 'artificial' grey pixels, and thus it removes the color from your image.
Try zooming into the image to 100%, and suddenly the color disapears. So this is a preview 'bug' that is kind of unavoidable to be able to work on a zoomed out file.
If you do the graphic pen filter with non-pure black and white (90% grey, and 10% for example), then the color mode has something that it can color, and you get much more accurate zoomed out view of what your image looks like.
Does this make sense?
~Edit: removed unecessary previous posts