You will notice that users from those so-called "blocked" instances can still:
- respond to your comments
- vote on your content
- send you DMs
- which are allowed to trigger notifications
- post in your communities
- etc.
What it blocks:
- you from seeing communities housed on those instances (even if posted from people on other instances)
In short it should have been named a "community mute" rather than an "instance block". The best way to block an entire instance frankly is to switch from Lemmy to PieFed. Otherwise there is only a tiny minority of apps (Sync and Connect iirc) that will offer that - the rest merely connect you to the same misnamed instance block (but actually no and rather community muting) feature inbuilt into Lemmy, unless you start to get into things like hacking your feed with a browser plugin to filter users from instances that you want blocked.

Careful, don't give them any ideas now...