You are right, sorry. The Fade function is also not available when you work in 48-bit mode. For 48-bit images please do this:
1. Copy the first image you want to fade to the Clipboard with Edit > Copy All.
2. Apply the edition step(s).
3. Go to Image > Combine. Once in the Combine Images dialog, click the Clipboard button, select Fade for Operation, set the Opacity level and click OK.
Regarding the image quality question, the recommendation is to work with the image as much as possible in 48-bit mode, and only convert it to 24-bit mode when saving to JPEG to share your work or upload to the web, because the existence of more shades per color channel (65,536 instead of only 256) means that more operations can be performed on the image without risk of noticeable banding or posterization.