Maybe this could be tackled differently.
What about having a general "trigger start" mode which is engaged by hitting the pause button while playback is stopped. Playback or recording is trigger by the first incoming MIDI note.
So, this would work for both regular playback as well as recording situations.
Then for the recording modes, you just select from three modes, overdub, overwrite, one-shot (always overwrite).
That should clear up some complicated mode selection?
For me I would want overwrite to be the default mode (RED blinking), then overdub is second (ORANGE blinking), then one-shot (RED solid) and you could add one-shot overdub if needed (ORANGE solid)