If you're an ordinary Mastodon user, the "block domain" option does not block servers, it just mutes them. It hides their posts from you, but does not hide your posts from them.
Only server admins can do actual blocks through defederation, preferably on a server that has activated "authorized fetch".
For example, if you want to avoid threads.net, you need to join a server that has defederated threads.net. (You can find nice servers that block threads.net at https://fedi.garden)