First of all I doubt that the animation is wrong - it's directly ripped (for educational purposes only!) from Doom3 (directly meaning from the pk4 file, not downloaded from some crappy site). Walk cycle looks ok when played itself.
As I have written, that blending is capped to 0-50%, meaning at max we have 50%-50% of animation-bindpose mix and at min we have 0-100% proportion (no animation, just plain bind pose - parts of the vid where the model is not moving). I did it to emphasise where the problem occurs. If I would do 100%-0%, most of the time you would just see the original walk animation without popping. At the beginning of the video you see roughly 50%-50%.
I tried with Nlerp but it looks even worse - body is completely dismembered and limbs are spinning in various directions and I'm like WTF.