I think that "auto blend layers>panorama" is assumed to make panoramas from layers ...
And, there is also "auto align layers" for making panoramas from layers.
I tried "auto blend layers>panorama" with an image and it can not make a panorama from the two layers trial image ... "auto align layers" can make a panorama easily from the same image.
So, I can see that there is a clear difference between the "auto align layers" and "auto blend layers>panorama" ...
But I could not understand the intention of designers of PS about the usage difference between the "auto align layers" and "auto blend layers>panorama"?