Yes, and thus you have one giant mega community in which every bigot can access anyone and everyone else. Which is what a Fediverse without instance blocks would be like
Instance blocks have been admin/instance level before user level instance blocks were a thing. User level instance blocks are more accurately user level filters. Only admin level instance blocks are true blocks.
Admin level blocks are what I'm referring to in this conversation and that most people assume when they see the term "instance block"