I think it only explodes when it's interpolated. In the start of the animation her smile and blink morphs is set to be 1 at the same time and it didn't explode. It could be because the vertices in the animation are different from each other (blink is set to the eyes, and smile is set to the mouth), which doesn't interact with each other.
Though, it was and still is trial and error when doing shp0 animation.
Oh! That makes sense.
In the NW4R documentation, it says they use a simple formula that interpolates between
two points with a percentage. I had originally used that, but it didn't work because I was applying each morph to the main set as a whole (not just to vertices that had different positions in each morph set), so only the last one applied showed.
I later had Brawlbox calculate the barycenter of each vertex in all applied morphs and the original set, so now it works under any circumstances with as many morph targets as you want. I guess the same doesn't apply for in-game since they only use the simple formula.
I do need to update the SHP0 editor a bit soon, so I can add some checks to make sure custom animations work in-game.

Thanks for the insight. Another problem solved?
Oh yeah, what about model imports that use Brawl default SHP0s? Does anyone know if that works? I've only tested making custom ones for custom models. I guess I should test defaults too, huh.