.. you cannot play Form of Mist at superior Protean (to continue the action) when the extra stealth provided by Form of Mist is not needed (as compared to the intercept of the currently blocking minion). As a general rule, you cannot play stealth cards when the stealth is not (yet) needed, and Form of Mist has no exception clause in its card text. Therefore the general rules apply, and you cannot play Form of Mist when you don’t need the stealth.
Granted this is a cornercase, because the blocking minion needs to lose some of the intercept during the resulting combat, but it can happen. For example, the retainers (Raven Spy, Mr. Wintrop) providing the intercept get killed during combat (e.g. by Weather Control) or the acting minion nullifies the intercept during combat (Stanislava negates the retainers intercept during combat).