Yes. And Talos isn't a real Aedra. And two of the items accepted by Martin as Daedric blood were created by mortals. So the whole quest is crock until someone comes up with a compelling explanation for why it isn't.
So some thoughts on why it works. Magic is mostly symbolic and symbolism goes by association. The ritual combines two opposites bodies, the blood, and two opposite souls, the energy. Much like the creation of Mundus actually. The result of that would be a world or a person, both decidedly grey and much like Mundus in the Dawn Era. In other words, Mankar Camoran and Paradise.
There is more : Mankar is trying to mantle Lorkhan, creating his own realms and deceiving his people into a new kind of mortality. He almost claims in the paradise. Martin (who knows more than it seems) is trying to mantle Akatosh (and he will eventually). He needs this ritual to mantle the creation of the Mundus, and become part of this creation. And then he sends his champion to kill Mankar Camoran and take the amulet, the heart of this world, as Akatosh sent Trinimac to kill Lorkhan and get his heart. So he uses the strength of this old myth to ensure that the player will be able to kill Manker in his own realm, which would have been impossible otherwise.