I will agree to that if you can find me a screen that can display actual blue at 100% luminance. Medium white is white thus achromatic. Whatever color you have in highlights is a by-product of some gamut-clipping artifact. You might be used to it or even like it, but it is wrong nonetheless, and I would actually be interested to see how that blue compares to the original scene chromaticity.
The grey vs. colorful reconstruction is parametric in my algo, so you can choose which reconstruction strategy you want to favor, but in this case, choosing the colorful one yields magenta highlights because of clipping + white balance (of course, there is still the option of clipping the whole pixed if any channel is clipped, so you avoid magenta in there, but that limits the reconstructing power too).
Same here, highlights recovery happens before tonemapping (in the same module, but still before). The difference is we don’t necessarily try to recover the original scene, but rather to blend clipped and valid areas in a more subtle way. So, in that regard, it makes sense to bound the clipping threshold to the right bound of the dynamic range.