It depends on what version of Lemmy your instance is using.
The larger the instance the more versions they're likely behind as they wait for the worst bugs to be fixed first. So you're probably going to get different answers from different people.
But blocking an instance should prevent you from seeing posts on that instance, but you'd still see posts and comments made by users of that instance, on another instance.
Like, I've blocked your instance due to how your main admin moderates, so if you had made this post there, I wouldn't have seen it. But since you posted to lemmy.ca, I saw it.
My instance was on a version where I wouldn't get reply notifications from a user of an instance I'd blocked, but that seems to have changed recently as I've gotten notifications recently.
I'm not sure how far behind your instance is from the developers instance: lemmy.ml. So I'm not sure how they handle reply notifications.