So when an instance is blocked, it means users on the blocked instance will no longer be able to see that instance’s content. For example, beehaw.org has now blocked lemmy.world. However with the way federation works, the content from beehaw is cached on lemmy.world servers. So you can only see what has already been cached; there will be no updated content on any existing cache.

Probably something behind the scenes, at least judging from how a lot of instance blocks happen on Mastodon.

I’ve been here for years already, but I’m still going to be checking Reddit. There are subs there that either don’t exist here (r/TaylorSwift - yes, really) or have a close-knit community that I can’t see moving to lemmy anytime soon (r/greyhounds), or exist but are really just something like placeholders but where I get tons of aggregated news where an RSS would be ridiculous to curate (r/soccer and r/liverpoolfc).

Pretty much this.

Mastodon had similar issues for a long while, but as it’s more mature than lemmy, export features now exist. Posts from a dead instance will exist on federated instances, but I think the biggest issue would be losing on what communities you subscribe to.