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.