Alice and Bob don't like each other and mute each other. Both are onThis already happens for each member's mute or follow choices. So not much new about that part.
Now, we have Charlie, another digest user who is agnostic to Alice'sIt doesn't matter whether Charlie uses individual vs digest, nor email vs web. All that matters is that Charlie quoted either or both of them.
And no, I don't expect the system to do anything novel about such quotes. It already does its best to remove trailing quotes from digest, and to hide trailing quotes on the web. I don't expect any extra effort to detect quotes of muted members.
IMO Alice and Bob would simply have to accept that limitation as part of their use of the group. Or unsubscribe.