There are two options in which you can participate in a game with a player that you have blocked:

1. The block option is disabled at tournaments because tournament players are distributed on a completely random basis.
2. If you have blocked someone, and they create a game in the Play with Friends room, you will be able to view and join that game.
However, if you create a game in the Play with Friends room, the player blocked by you will not be able to view or join that game.