What the hell is it for? It does absolutely nothing in my opinion other then "hide" messages... if you want to call it that.

See https://www.warzone.com/wiki/Blocklist:

Any games you create with Open Seats will not show up for them on the Open Games tab.
If they do somehow find an open game you created (such as if another player gives them the link to it), they still won't be allowed to join it.
Any open tournaments you create will not show up for them on the Open Tournaments page, and just like games they aren't able to join it if even if they do find it.
They will have a small "B" icon next to their name in the lobby and main game screen.
A small "B" appears on their box on the Open Games tab and My Games page. This makes it easier to avoid games that they've joined.
Any chat they send to a game or tournament will be hidden from view. If you want to see it, a link is provided to reveal it.
They are forbidden from inviting you to team ladder.
They cannot add you as a Friend.
If they have Manager Rights within a Clan, they cannot invite you to join that Clan.

Seems awfully useless.

What did you want it to do?

Prevent callers.