I've got plenty of moss growing in the forest near my place, moisture and shade abounds. I've found what appears to be a credible method for propagating moss, and I'd love to hear if any Permies here know of any methods for using it as a substitute for peat moss when seed starting or nursing young trees! If a bunch of moss is composted in the usual manner, does it work as well as peat-moss style potting soil, or does it only make typical humus compost?

Depending on the species, this could likely work, but it wouldn't be instant. Since the peat moss we use in potting mix is well decayed, you'd have to grow the moss, and then compost it until it's humus, and then it could likely be mixed with worm castings, compost, coir, etc, and used as a potting mix. I don't see why this wouldn't work.

I'm curious of the method you've found to grow the moss. I know of a way to make moss graffiti, where you take butter milk and a bit of moss, and blend it up, and then paint it on a wall or surface and the moss grows in whatever shape you paint it. Is this similar, or is your method different?

Yup, that's the very same technique I read about.