I mislabeled normal mode, it should be called command mode. For the example
you provided I don't see any problem, because when you execute set -o emacs
it will simply first change vi mode back to insert mode, then change vi
mode to emacs.
The way it works now is a bit weird, because when you run set -o emacs it
will first change to emacs mode, and then I assume it will change mode
parameter for vi mode to be an insert mode, without any visible change.

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