Reporting this as a bug in reference to this thread... it only affects Photo, both 2.0.4 and 2.10.1706, it works as expected in both Designer and Publisher.
It also appears to be macOS specific...
V2 Compared to V1
Granite.mp4
Clicking on the Blend Mode label in the FX panel reveals the effect in V2, it's just not being applied...
Granite FX.mp4