However, the proposer can also modify the value proposed by somebody else, and it turns out that this is a perfectly valid algorithm for implementing a distributed read-modify-write. This variant does more than just consensus---it basically behaves like a fault-tolerant memory with an atomic update operation (think compare-and-swap or load-linked/store-conditional). In his blog post, GP also mentions that paxos is a read-modify-write transaction, but perhaps I read too much into what he is saying. Either way, this RMW variant is correct, I have verified it exhaustively with TLA+, and it is used in a few production systems that I have implemented.
The difficulty is now to say exactly what this RMW variant does. I was hoping that GP (or anybody else) may have some insights.