The Block at Downtime option is only available, if you have set a Screen Time Passcode. For obvious reasons, only you (parent) should know the passcode.
When you toggle ON Block at Downtime, an app when launched will get the Screen Time notification - with an Ask for More Time request. If your child selects this option - only one minute more access to the app is granted. For additional time, the Screen Time Passcode will be required.
When you toggle OFF Block at Downtime, an app when launched will get the Screen Time notification - with an Ignore Limit request. If your child selects this option - access to the app can be granted the Screen Time Passcode will NOT be required.