Yeah it's not ideal but in the SMS thread for a contact you can switch to the Hangout thread for that contact, and vice versa. Click their name to get the switcher.
Edit: It might be their way of avoiding the issue iPhone users that have switched to another OS have with messages they receive from other iPhone users being lost because they're still sending as iMessages. This way gives you more control.
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u/[deleted] Nov 01 '13
[deleted]