I was poking around a few groups I don't normally check and noticed a number of accounts with fuzzy pictures, sure enough they've blocked me but I have never interacted with them before. Ok by me
My understanding is that If they blocked you, none of you would see each other. The blurry thing I believe has to do with age (younger users I think, but I'm not 100% sure)
sometimes it's someone being clever with making a profile pic that looks how a blocked profile would show up, sometimes it's someone who is or has set their age to that of a minor, sometimes people block on age range or plurality (bing a 'C' here is sometimes enough), or sometimes you just never know. people is weird.