With normal finger operation of a brake lever, brake lines will see internal pressures of 1000 psi (or more). That hydraulic pressure applies over the area of the hydraulic puck and produces many hundreds of pounds force on the brake pads. The rotation of the rotors while the brake pads are compressed with hundreds of pounds of force onto the rotors results in hundreds of pounds of force forward into the SMC during normal braking. Even the mightiest hand squeeze of the SMC at best will produce tens of pounds of force--in other words, a brute force hand test of the SMC is less effective at testing the SMC function than it naturally experiences during normal braking.
So, if a SMC doesn't activate by the same finger pressure as pulling a brake lever, that does NOT prove that the SMC is faulty. It only gives insight that it may be faulty or worthy of rebuild.
The biggest indicator of whether the SMC is faulty is whether it fully releases the rear brake when the SMC is released.
While your description is very good at explaining how the hydraulic system works, it may also be confusing to someone who has never been trained, or done the brake system inspection before.
While you or I may be able to feel a failing SMC being pushed through corrosion, someone else may not.
INSPECTION: - Place the motorcycle on its center stand and shift the transmission into neutral. Push the left front brake caliper upward by hand.
Make sure the rear wheel does not turn while the left front brake caliper is pushed.
-Jack up the motorcycle to raise the front wheel off the ground. Apply the rear brake pedal. Make sure the front wheel does not turn while the rear brake pedal is applied.
The reason it was suggested to the OP to replace the SMC, was as you indicated, the rear brakes would not release after either of the brakes were applied.
Since the rear wheel was already removed, the primary test could not be made at that time, however, after discussing what he had done and tried up to that point, we decided it may be a good idea to replace the SMC due to both the age of the unit, history of issues with them, and the fact that rear brakes would not release , which in your own words, "The biggest indicator of whether the SMC is faulty is whether it fully releases the rear brake when the SMC is released" which it was not.
I think we should wait until the new SMC is installed, and the brakes are flushed and bled correctly, to eliminate that from the possible cause of his brake issues, and stop confusing matters with all this jibber jabber.