Previously, if X blocks Y, X isn't recommended Y's posts, Y can't interact with X's posts, Y can't see X's posts.
Now, if X blocks Y, X isn't recommended Y's posts, Y can't interact with X's posts, but Y can see X's posts.
The new system changes nothing in terms of what the person doing the blocking experiences. It fixes abuses of the previous block system, where scammers, grifters and impersonators hide behind blocks to reduce the chances of being caught. It also eliminates the silly fiction that a block prevented stalkers from stalking their target on a platform that has free accounts and the ability to easily switch between multiple accounts.
Apple's policy is that apps must have "The ability to block abusive users from the service." They don't say that users should be able to block other users from seeing their posts. In fact, this is also how blocks work on other platforms like Discord. If I block a user, I don't see their posts unless I click on them, they can see mine, but they can't directly ping or reply to me. Similarly with Reddit, being blocked from a subreddit makes me unable to interact with it, but lets me continue to view it.