I do understand the difference between Stain and Dye/tint. That's why I chose dye instead of stain for my bass. Stain would not have given me any type of burst, as you cannot fade a stain. You can sand it and maybe get some fade, but it wouldn't be nearly as awesome as with dye.
Anywho, my question has been answered. Basically, the answer is more obvious now that I've reread the article and the answers to this post. I know stains are uniform, so it only makes sense that sanding with a stain as your compound for wet sanding will produce the same results, as long as you're sanding with the same stain as the original one applied.
If i use dye as my compound, it'll just come out as a dark spot, or a lighter spot, and I'd have to resand in order to get the proper evenness in color.