Yes. Blue is allowed to continue to sail above her proper course. Blue becomes overlapped from clear astern and rule 17 requires her not to sail above her proper course while they remain overlapped within two of Blue's lengths of each other. Blue eventually reaches a distance of more than two lengths from Red. At this moment rule 17 ceases to apply. Only rule 11 applies as Blue sails back towards Red, and Blue is allowed to continue to sail above her proper course. Red will have to keep clear.