Given how discovery in Mastodon works, by following "boosted" (think: re-tweeted) content creator or reading new people in a discussion, you wouldn't even know these accounts exist - sure, you can manually enter a mastodon id in the search bar to go directly to an account somewhere else (and thus try to access a potentially blocked node), but that's not the common use-case.

Now, if that increases or decreases the problem space is a philosophical question. I personally do have issues with blocking instances as a whole because one admin disagrees with another admin on unrelated issues.

If I get denied access to other people to organise around, e.g. building our own zen retreat because my admin and their admin disagree on political factions or because one admin nuked the connection to another instance for not being trigger-happy enough against their own users, everyone loses. Such technical possibilities and - in fact - recommendations run against the ideas of a civil society.