Zom, I have a question about what you said.
As I understand what you say,
#3 is noticing one's mind is full of greed in the moment,
#4, You notice how the greed subsides (as an automatic result) of you observing it.
Am I correct?
Well, greed won't subdue if you just observe it. Actually Buddha said in MN 2, that this practice of "just observing defilements and doing nothing" is incorrect. Such kind of tolerance and passive observing is actual for other things, not defilements:"And what are the fermentations to be abandoned by tolerating? There is the case where a monk, reflecting appropriately, endures. He tolerates cold, heat, hunger, & thirst; the touch of flies, mosquitoes, wind, sun, & reptiles; ill-spoken, unwelcome words & bodily feelings that, when they arise, are painful, racking, sharp, piercing, disagreeable, displeasing, & menacing to life".
And concerning defilements - the right practice is to put effort to remove them as soon as they intruded the mind:"And what are the fermentations to be abandoned by destroying? There is the case where a monk, reflecting appropriately, does not tolerate an arisen thought of sensuality. He abandons it, destroys it, dispels it, & wipes it out of existence.
Reflecting appropriately, he does not tolerate an arisen thought of ill will...
Reflecting appropriately, he does not tolerate an arisen thought of cruelty...
Reflecting appropriately, he does not tolerate arisen evil, unskillful mental qualities. He abandons them, destroys them, dispels them, & wipes them out of existence. The fermentations, vexation, or fever that would arise if he were not to destroy these things do not arise for him when he destroys them. These are called the fermentations to be abandoned by destroying".
So the right thing is to notice, how greed subsides when you use skilful methods to subdue it (listed, for example, in MN 20
). However, that is a bit off topic. The main point is that the 4th satipatthana is about direct seeing the workings of all these methods. For example, if you never use in practice 4th satipatthana, you will never get direct knowledge that these or that practical methods really work (in the present moment, in the "now"). That is why it is so important to practise.
And even more than that. Practising 4th satipatthana you can also see (directly) how defilements arise, if you direct your mind onto some object. For example, you "establish mindfulness in 4th satipatthana" and direct your mind onto some picture with some tasty food. If your mindfulness is strong enough, you will see how this directing results in immediate arising of desire, craving for food. Seeing how this very process happening - is the 4th satipatthana. Now, after that, when craving intruded your mind, you can switch your mindfulness to 3rd satipatthana. And directly observe the craving (passion) itself - just see how it feels, how your mind is conditioned by it, how it is disturbed and distorted by it, how it suddenly became turbid. Seeing this mind state in the present moment means that you are practising mindfulness established in 3rd satipatthana.
I think you could look at the this the other way round too, ie how state of mind ( 3rd frame ) colours and influences the mind objects which arise ( 4th frame ).
The thing is that "hindrance" is not a mind object, but is a state of the mind itself. Now what are they, these hindrances? These are different states of mind: greedy mind, angry mind, lazy mind, doubful mind, so on. That is why there should be the difference between "greedy mind of 3rd satipatthana" and "greedy mind of 4th satipatthana". Many suttas tell us that 4th satipatthana is "5 hindrances vs 7 factors of enlightenment". Also many suttas in satipatthana samyutta in SN, mentioning 5 hindrances vs 7 factors of enlightenment, speak about the workings and correlation processes of these 2 camps - hindrances and bojjangas (enlightenment factors). Taking this information into account, you start to see how to understand practice of 4th satipatthana properly. And how it differs from the 3rd one.