I’m struggling with the layer system, with the normal blend actually. The main layers are set up; the masks work, but the baked normal is replaced by the top layer.
My goal is to have simple mat layer in background with the baked normal, and Layers on top with a mirco detail normal map. How do I blend normals with layers, how do I keep the baked background normal and blend wirh micro detail normal?
It is unclear to me why you want to use a complex layering material for a skeletal mesh character. Layering is usually done for landscape materials, because you want to create smooth material transitions. The character mesh can be setup much easier when you UV map the parts needed for your material, e.g. metal related parts have their own material, body skin parts another one, and so on. There is a relative simple to use plugin on the market to map UV textures for materials, called Mesh Tool (only works for static meshes), there appears to be something similar in 4.24 (did not tried), or you can use Blender to UV map (see tutorials on YT).
Layering will not work as intended for your scenario (characters in general), because you have all kinds of textures covering the entire mesh surfaces, it’s not like a landscape where you can use layering to have the rocks at the bottom, ground sand, then grass on top.