The Color Blend Mode in Photoshop takes the “grey levels” of the base color and colors them with the blend color: Color Blend Mode: Creates a result color with the luminance of the base color and the hue and saturation of the blend color. This preserves the gray levels in the image and is useful for coloring monochrome images and for tinting color images.

As an example, here’s a layer that is half red, half blue:

Set to Color Mode and placed over another image, you get this:

Color Mode is pretty close to Hue Mode, so let’s look at Hue Mode again to get rid of any confusion. Hue Mode keeps the brightness and satuation of the base color but applies the hue of the blend layer. Color Mode keeps the brightness of the base color and applies both the hue and saturation of the blend color.

So here’s how the scenario changes when the blue/red layer is set to Hue Mode instead:

As you can see, there’s more “grey” in this picture; the blue and reds are desaturated in the areas where the original image didn’t have much saturation.

Does that make more sense?

And following Photoshop’s practical application advice, here is a sepia-toned cherry blossom: