Sure you can do it in less steps,i just expanded for better understanding
Now it depends what shape you want and if you can fillet the solid
There are little differences between two workflows



Can you fillet it ?
If you want different fillet radius between blue edges and the rest you can fillet first using red line lenght as radius,not more





I follow your workflow without fillet the surface to subtract



when i do the final fillet it doesn't work (radius 1mm)



Fillet engine must have good conditions to work(as Michael explained many times),little variations can make the difference
Probably this is happened to Finema

M