Nikki, this is a little burp. All it means is that you won't receive the e-mail(s) from eBay when your auction has launched. I don't know why it happens though.
When you block a person, they can no longer invite you to a private message or post to your profile wall. Replies and comments they make will be collapsed/hidden by default. Finally, you'll never receive email notifications about content they create or likes they designate for your content.
Note: if you proceed, you will no longer be following .