iNat is about open data, so the observations are viewable even if one is not logged in. That’s why blocking only prevents interactions on iNat. If you really feel the need to see observations from people who’ve blocked you, then open up a private browser window or just log out in your current window and use the Explore page.
Yes, but as I mentioned above iNat is about open data and sharing. Even if this person was not on iNat, they could still see the observations. This is why we say that iNat’s not a way to collect secret information.
EDIT:
Every iNat observation is a public record of where you were in a time and place. If someone was stalking you, for example, they might be able to discern a pattern in your behavior and harrass you or harm you. This is an unfortunate reality for many people. It’s why iNaturalist doesn’t require people to use their real names, and why observations can be manually obscured or made private. That obviously doesn’t remove all risk, as Charlie mentioned, but it does provide some mitigation for risk.