you can use sky entity alpha, if you set a proper sky colour (I recommend a nearly similar as fog colour), this blending makes sky less sharp too, so ideal for this purpose. mtl_sky does not affect all kinds of skies, as I remember sky cube is the one that is excluded only as it is drawn by the engine as 4 sprites (causing the border artifacts that you can lower by using a proper sky colour).

advertisement: of course, you can test it in real-time in my editor easily, just note the values (or use its sky system to handle easily 2 sky domes a sky cube or a sky model)