Let's look at how likely this problem is. We'll consider 3 people:
Y - You (who got blocked)
B - Blocker
F - Friend (or potential friend)
Firstly, we have to assume that all three of you would be online at the same time and in the same place. That is, in itself, very unlikely. In situatuions where it IS likely (CG's or whatever), these are crowded systems where instancing would be a free-for-all anyhow, so you're unlikely to be instanced with any specific person there.
So already it's very unlikely that instancing between Y and F would have occurred. Unless it was a prearranged meeting in an uncrowded location, but then it would be very unlikely that B would also be there.
If all of these coincidences fall into place, the outcome depends on the order in which these people arrive. There are 6 possibilities:
YFB: Blocker arrives last, Y and F meet, B gets a new instance.
FYB: Blocker arrives last, Y and F meet, B gets a new instance.
YBF: Y and B are in separate instances, F could meet either (50% chance).
FBY: F and B together, Y gets new instance.
BYF: Y and B are in separate instances, F could meet either (50% chance).
BFY: F and B together, Y gets new instance.
So, overall there's a 50% chance that Y will still be instanced with F despite B's block. And interestingly there's the same 50% chance that B will be instanced with F, so the effect on B's instancing is exactly the same as the effect on Y's instancing: the block equally affects both the blocker and the blockee's ability to meet others.
The person hit hardest will be the one who either blocks, or gets blocked by, the greater number of people.