Wallace's samatha practice, based on Padmasambhava: Am I doing it right?

I find the instruction confusing & contradicted because, to practise this advanced level of practise, there should be no (problematic/hindering) thoughts. The contradictions possibly arise because Wallace, as a professional Western teacher, does not want to alienate his audience.

In my opinion, 'thoughts' should not be mentioned since the instruction begins with: "let your awareness come to rest in stillness and in its own natural clarity".

In addition, 'explicitly be aware of something' & 'take note of the duration of each in breath, each out breath" should not be mentioned, since the instruction states: " without explicitly directing your attention to the sensations of the breath".

There is no need for Wallace to make the dichotomy of 'explicitly' & 'implicitly' because this confuses the meditation.

The meditation is to rest the mind in a silent natural state. In other words, in accordance with the instructions of the Buddha, the meditation is to establish the mind in a state free from craving.

When this is done, awareness of the breath will come to dominate the awareness of the mind because, in a state of silence, the breath is automatically the grossest sense object.

Even the slightest effort to 'bend' the mind towards the breath will defeat the purpose of the meditation & defeat the progress to jhana.

The Buddha taught:

There is the case where a monk develops mindfulness as a factor for awakening dependent on seclusion, dependent on dispassion (non-craving), dependent on cessation, that manifests as relinquishment (letting go).

Anapanasati Sutta

~~

And what is the faculty of concentration? There is the case where a noble disciple, making it his object to let go, attains concentration, attains singleness of mind. Quite withdrawn from sensuality, withdrawn from unskillful mental qualities, he enters & remains in the first jhana...

Indriya-vibhanga Sutta

This PDF may be helpful.

Note: The word 'mindfulness' ('sati') does not mean 'awareness'. There is no such thing as being 'mindful of thoughts' or 'mindful of breathing'. 'Mindfulness' means 'to remember'. Remembering to keep the mind in a state of silent awareness, free from craving, is the practise of 'mindfulness'. Remembering to let go of attachment to objects (such as attachment to thoughts or attachment to breathing or attachment to progress) is the practise of mindfulness. The term 'anapanasati' means 'mindfulness with breathing' or 'mindfulness when breathing' rather than 'mindfulness of breathing'. These distinctions are crucial for understanding practise as this advanced level.

I am combining awareness (mindfulness of my thoughts with introspection) with mindfulness of the duration of in/out breaths.

This is right. Anapanasati Sutta mentions about discerning long or short breaths as the 2nd step in the 1st triad.

When thoughts arise, they are mindfully observed, but not viewed as an interruption of mindfulness of breathing.

Realising that thoughts arisen itself sometimes bring you mind back. If not 1st be aware of the through and breath. Then look for any sensation that the thoughts might have brought, e.g. discomfort if they were angry thoughts. Finally actively redirect you mind to the chosen object.

When no thoughts are in mind, focus shifts to the mindfulness of breathing.

Initially you have to keep brining back you mind to the breath even if it does not wander away.

Mindfulness of breathing seems like a place-holder for attention when no thoughts are in mind.

This is how some meditation master teach this, but thinking and pondering is verbal fabrication which need also be calmed. [Samma,ditthi Sutta]

Also the following might be of interest: Anapanasati: Mindfulness with Breathing - Unveiling the Secrets of Life by Ven Buddhadasa Bhikkhu