So when an instance is blocked, it means users on the blocked instance will no longer be able to see that instance’s content. For example, beehaw.org has now blocked lemmy.world. However with the way federation works, the content from beehaw is cached on lemmy.world servers. So you can only see what has already been cached; there will be no updated content on any existing cache.
Edit: here's a recent post from kbin.social going into further detail on how federation works.