Please be aware that user-level instance blocking is not the same as instance-level defederation. User-level instance blocking is equivalent to blocking all the communities from that instance. AFAIK you'll still see posts and comments from the blocked instance in other communities. More problematically, the blocked instance still influences your feed via its votes.
On Thunder, you can also long press on a comment or post, and it will bring up an action menu. If you click the "Instance" option there, you should see a "Block Instance" option.
No. User-level instance blocking is not the same as instance-level defederation. User-level instance blocking is equivalent to blocking all the communities from that instance. AFAIK you'll still see posts and comments from the blocked instance in other communities. More problematically, the blocked instance still influences your feed via its votes.