This is possible in certain game engines, but I don’t know if Blender can’t due to rendering limitations.
It’s absolutely possible, you’ll just need to mix normal maps.
I understand, but I want to do it without being reliant on combining it into 1 shader and being bound by UVs, but rather mesh based using decal planes.
This is unrelated to the mixing itself, you can use other techniques to do decals. Transfering UV coordinates by proximity or using an external object as texture coordinate source within the shader
Then maybe look at geometry nodes and do your normal blending there?
Hope that helps.
At some point, you will have to use shader nodes to combine the normal maps, there’s just no way around that. As said above, you can use decal planes with UV projection or some other method