can this be smoothed/feathered with a DAMP sponge? does adding any moisture mess with this product?

Thank you for posting your inquiry on DAP Flexible Floor Patch and Leveler. As indicated on the product package label and supporting product literature: "Using a broad knife or a smooth face trowel, apply the Floor Patch and Leveler directly to the area to be filled." Lightly misting the application tool with a spray bottle (filled with clean water) can aid in tooling/smoothing process. Likewise, it is considered best practice to work in small sections, this helps to ensure that you do not exceed the product’s “open time” (available working time). Once the product has begun to “skin over” (surface dry), further troweling is not recommended. As a general rule, flexible repair compounds such as DAP Flexible Floor Patch and Leveler should be tooled/smoothed/finished while still wet. Sanding is typically only recommended at the "edges" of the patched area, in order to "feather" (achieve a gradual transition) between the patched area and the existing surface. At your convenience, please contact DAP’s Technical Customer Service Department at 888-327-8477 so that we can obtain some additional information from you about your experience and to offer some additional product application/finishing guidance.