The Hong-Ou-Mandel (HOM) effect is widely regarded as the quintessential quantum interference phenomenon in optics. In this work we examine how nonlinearity can smear statistical photon bunching in the HOM interferometer. We model both the nonlinearity and a balanced beam splitter with a single two-level system and calculate a finite probability of anti-bunching arising in this geometry. We thus argue that the presence of such nonlinearity would reduce the visibility in the standard HOM setup, offering some explanation for the diminution of the HOM visibility observed in many experiments. We use the same model to show that the nonlinearity affects a resonant two-photon propagation through a two-level impurity in a waveguide due to a " weak photon blockade" caused by the impossibility of double-occupancy and argue that this effect might be stronger for multi-photon propagation.
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Funding: Leverhulme Trust via Grant No. RPG-380