no one is missing the point, it has been state multiple times: when you get blocked you no longer get to reply to that person, and all previews replies are hidden, to them and everyone else.
the one other point that seems to be ignore though is: you are still capable of continuing that conversation on your own terms on you own feed. your posts will not be visible to the people blocking you but everyone else can still see them.
it's probably the single feature that will drive me away from Bluesky given how abused it is. not fun erroneously getting lumped in with MAGA and finding yourself in a void.