How exactly does the fade-out feature work in the instrument envelope? Be default it is set to 128 so does this mean that when using a linear fade out of length, say, 6 ticks, the volume will be faded out in exactly those 6 ticks, or will I need to set the fade-out to 0 for that?

An important part I actually forgot to add in my post above is that I’ve enabled the sustain and I’m using a note off command when a new note is played.

I believe fade-out’s behaviour was not changed since FastTracker2.

FT2’s fadeout works this way:

for each tick, the fadeout value is subtracted to the number representing the wave amplitude (ranging form 0 to 32767 for 16bit resolution).

Quite odd, I know, but in the golden ages trackers worked this way and no changes has been made since that time,