The fix would make Damus display and post quoted notes (i.e. event mentions) and replies to threads consistently with the other clients per the NIP-10 preferred spec.

Yes, in theory, Damus would be able to display a true standalone note with the quoted note positioned underneath. A note like that would have a single “e” tag with the “mention” marker. It would not have any “e” tags with “root” or “reply”.