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because it shuts out everyone on that instance.
But it doesn’t. Unless they’ve changed the functionality in the last 3 major revisions or so, a user blocking an instance blocks all posts from that instance. Not the users or their comments on other posts.
It’s an easier way than blocking each community from that instance individually.
A user blocking an instance does not block the users from that instance from interacting with the user who blocked.
It’s not well explained, but my understanding is that an instance block just prevents communities from that instance, and posts made by users on thay instance, from showing for the user that blocked the instance. Comments from users of that instance still show for the blocking user, and the block is one way anyway.