Yes. Rule 17 applies to Blue once the start signal is made, because she became overlapped from clear astern and Blue is not allowed to sail above her proper course once that concept kicks in at the start signal. In the absence of the red boat, Blue would still luff in the same manner to fetch the mark. Therefore Blue's luff does not break rule 17. Right after passing the mark however, Blue must bear away to a close-hauled course as her proper course.