Oh yeah, St Aug will absolutely take over if you water weekly, mow it at the highest setting, and only fertilize 3x per year. I absolutely rely on that fact in my back yard. We got some bermuda in it a few years ago during a drought period when I was not home to water right. The St Aug died from the drought and common bermuda filled right in. Two years after that, with some TLC, it's all St Augustine again. Now we have a new puppy so all bets are off. One area will be mulched so he's not a muddy mess all summer, but we're hoping to keep the sunny area green with St Aug. If you inset the stepping stones enough to keep them below the mower, then you will be good. Many years ago my dog wore a path from our back deck to the garage. I had a local decking guy build a wooden walkway, deck style, following the curving dog path. It turned out beautiful, much better than we pictured at first, and lasted 15 years until we remodeled the yard again. The dog was very happy to walk on the wood, too, so everyone was happy.

At the same time, I would continue with the St Aug. I've seen St Aug completely overrun bermuda in a matter of a few years. It was a situation where the neighbor's St Aug encroached into a very nice bermuda turf. Both lawns are now 100% St Augustine with no apparent signs of bermuda. These two grasses can dominate over each other depending on how you care for them. If you keep the turf watered regularly (at least ever 2 weeks in the heat of summer) and you mow it at your mower's highest setting, you will have a lawn that looks like St Augustine. In fact I believe the St Aug will completely kill out bermuda turf. Texas Weed and I have different experiences with this, and we've talked about it. But if you let a drought go without watering at all, you will have a bermuda lawn with no St Augustine at all. St Augustine will die if not watered whereas bermuda just goes dormant. When a St Aug turf dies, there will be common bermuda seeds ready to sprout and fill in. I suspect that is the case in your yard. The biggest problem comes if you mow low and still water. Then you will have a lawn that looks very weedy because the two grasses will both kick into a low growing mode. Low growing St Aug is pretty ugly in my opinion. Mix it into bermuda and mow low and it gets uglier. I would rent a sod cutter to remove the surface grass and then get enough pieces of Floratam St Augustine to cover the lawn. Roll that down and keep it moist until the roots knit in with the underlying soil. Don't get the grass and then the sod cutter. Fresh St Augustine grass on a pallet can suffocate before you get it down.

My soil and light are different from yours but I used to play games with the bermuda and St Aug that invaded my stone driveway. One year I would not water and watch the bermuda take over. Then next year I would water once a week and mow it high and watch the St Aug take over. I did that for about 10 years playing them back and forth. Now I'm doing that with some zoysia and bermuda. Infrequent watering and mowing high has kept all the grassy weeds out of the sunniest parts of my lawn for years. I have had the occasional bermuda, nutgrass, and wildflowers (that thing everyone calls wild onion) but they have all gone away. Weeds I cannot control with water and mowing are broadleafed weeds like henbit, oxalis and chickweed. Where do you live?

My guess would be heat stress and bug damage. When a portion of lawn becomes stressed it starts to weaken and bugs take full advantage of those areas. Im sure most of the damage is already done, but pay close attention to the area to see if its spreading. For now you could apply some Quality Compost in and around the trouble spots @ 1/4 to 1/2" thick. Brush or lightly rake the compost off the grass blades and down closer to the existing soil. As for the grass blades wilting/curling: This is perfectly normal. The grass blades curl/reduce surface area during the heat of the day in order to conserve water from evaporation through their leafs. If by the following morning the grass blades are still wilted, the grass should be watered within 24hrs. Are you sure your apply 3/4 to 1" of water with each irrigation cycle? If not do the tuna can test(link below) Here is a link that might be useful: How to calibrate your sprinkler