i wonder about that.Have you considered cutting small slots into the foam for the string to sit into?
Methinks that could help alleviate the "sharpening" of the string while still damping.
the foam quickly created its own deep grooves, and with the low E it was already riding that edge between being slightly sharp and not muting enough to be worth the effort
maybe different foam that's i dunno, taller and softer would do the trick, but on balance i'm not sure i'd recommend this mod unless you didn't mind flipping the mute and then retuning all the strings