Surface Appearance | Shadow Intensity

Hello, my partner @ShockingSsstompy and I have recently discovered that when selecting surface appearance and switching the alpha mode to transparency, the higher the shadow intensity the more transparent it is as shown bellow:


Compared to when it is set to overlay mode as shown here:

This got us wondering, would it be possible to use this feature to create a decal-esque scorch mark that would be applied on walls, but it would retain the current maps such as the normal map to make it appear as an indent?
Example of what we mean to replicate:
image

Any help would be greatly appreciated, thank you!

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