On the technical side, you post a bunch of actions to your local server (posts, comments, votes) and others who are interested pull copies of them to their server where they can respond or not.
On the social side, you subscribe to communities both locally and on other servers. Moderation is public, unlike reddit. And even if you're banned from a community or even a whole server, as long as it's not your home server (where your account is) you can just keep going without content from that server.
On the flip side, there's no real block function, the "block" is actually a mute. They keep posting but your server just doesn't show it to you. And if someone's enough of a shitkicker to get banned from their home instance, nothing stops them from joining another. Most veteran fedizens have three of four accounts already (in my case, to cover server downtime). And servers can outright ban whole other servers, including all their communities and users; this is called defederation.
To go back to the technical, all these blocks and bans and defederations come back to the same thing: someone saying "I'm not interested in the actions of this user / community / server, don't pull copies of it for me."