Yes, the M3 and 34 used to interwork at Chester.

The whole point of branding, is to encourage brand loyalty.
Except by structuring the timetables the way they do on an evening and Sunday, GNE are basically stating that brand loyalty doesnt matter outside peak times and by integrating and connecting services which would otherwise be un-connected, they are demonstrating this up and down the region.

However, the other choice they have, is to have buses sitting around laying over for a significant period of time (perfect excuse to increase fares - again) or to axe services.

It is the choice they have to make as a result of painting & branding anything that stops in the depot too long.
If core services were branded and nothing else, this issue wouldnt occur.
I pity the group of drivers sitting in the corner playing cards! Goodness knows what colour or garish vinyls they will end up decorated in!

Edit: As a side note, has anyone else noticed that particularly on an evening, Washington and Chester specifically are running a skeleton staff? Saltmeadows and Arriva run everything local in Washington and (I may have slipped up) only the X1 runs into the night from Washington.
Chester is in a similar position, with only a couple of routes working late.
Stanley, Deptford and Sunderland Road run a few more routes. Not sure about Winlaton, but guessing there are a few services out of there late on.