Nope - it is far worse than that, it also does not block messages either, only communities.

And worse than that even is that it used to do so, but the so-called "instance block" has actually gotten weaker over time. Imagine receiving notifications to your inbox for WEEKS and WEEKS upon making what you thought was a fairly innocuous comment in Chapotraphouse... and then going through all that again on Lemmygrad.ml! Purity beatings will continue until morale improves.

If you don't like let's say Lemmy.ml, then you are free to either block each and every single user on it individually (which one guy, ptz, actually did that! 🤣), or you are free to leave Lemmy itself (which I did myself, and am now enjoying the fantastic experience on PieFed! ❣️), or if you can find one you may join an instance that defederates from them (note that no major instances are willing to do so). Welcome to Reddit 2.0! Remember not to say anything bad about Russia, China, or North Korea or you'll be instance-wide banned from communities that you've never even heard of before! :-P

The "instance block" really is horribly misnamed - it should have been called a "community muting" imho. Oh well, what do I know, and here I thought that Lemmy.ml was a community for FOSS enthusiasts, hur-dur I wonder where I could have gotten that silly idea from!? 🤪