I haven't had much luck in finding a tutorial (might be using wrong key words) on how to make a decal that is both transparent and opaque with desirable results, so I figured I'd post mine here. Just figured this out yesterday as I was playing around with the material editor. Here's the shader network. Set the Blend Mode…
I think you're over thinking this one a bit and technically using AlphaComposite improperly. The AlphaComposite blend mode I believe is used for textures with a pre-multiplied alpha. You should probably be comparing Blend_Masked vs. Blend_Translucent. In other game engine tech these could be called 1-bit alpha vs. 8-bit…