Not just that, it is actually “just another instance”.
People have been blocking instances for the most ridiculous reasons, years before the “Twitter Migration” and Threads announcement. This Threads/Meta thing just got overblown because, “Meta/Facebook/Zuck”.
Instances, be it xyz, abc, mno, threads, tumblr, wordpress, whoever, can freely block whichever instance they want, for whatever reason they want. Their instance, their decision. It has always been that way since instance-blocking first appeared in fediverse software (which was years before Mastodon came into existence, AFAIK).