I think you are right about that. It seems clear to me that it was intended that you can replace a part of a block-pattern with an overlaid pattern in song mode, but as you can use the mute tool in song mode to mute block-patterns, it seems muting block-patterns with an empty pattern was not intended.
We could say they actually 'forgot' to make the slice-tool work on block-patterns the same way the mute-tool does because then you could simply slice a block-pattern in song mode to mute a part of the pattern.