Want to say this because the release notes make it perfectly clear. Instance blocking is not and cannot be considered an alternative to defederation.

Users can now block instances. Similar to community blocks, it means that any posts from communities which are hosted on that instance are hidden. However the block doesn’t affect users from the blocked instance, their posts and comments can still be seen normally in other communities.

Not a replacement for defederation, it’s still needed to keep instances healthy. Plus the fact that Lemmy doesn’t really even have blocks, they’re just mutes called blocks (which are only useful under the assumption that the blocked account is innocent, and the blocker is just having a fit or doesn’t have credibility), if we had a way to restrict malicious users then I would say being more hands off isn’t that bad but as it stands there isn’t so defederation and moderation is still important and can’t be substituted with blocking.