That is what I would want. If Lemmygrad users want to come to other instances, follow the rules, and engage in civil discussion, I would love to hear from them. I don't care what instance a user uses to log in. I just don't want to see their posts in my feed.
unfortunately, be aware that this feature is broken on some apps, such as clearing the instance blocklist whenever the app is restarted, rendering it basically useless.
Kbin's instance blocking didn't seem to be working for a while, instead it blocked users of instances at random (a few times I've seen a thread from a blocked instance but none of the comments from said instance show up).
It might be working (better) now but it's hard to tell exactly when it is or isn't. Same with the language filter. Though random posts/threads (sidebar) doesn't use filtering.
EDIT: Yeah, I think instance blocking only blocks users of that instance, as if a user of one instance posts on a blocked instance their post still shows up. Or close, I guess it's the domain that matters as someone else pointed out.
Kbin doesn't have instance blocking (yet). It has domain blocking. But if you block a domain, you block all of the text posts and image posts since they point to that domain. But you will still see the link posts since they point somewhere else.