Yes it unblocks them and you have to start fresh. I haven't seen a bombardment of spam (yet). Double check that on the phone: I could 'block' and the red circle/slash would show. If I went to any other mailbox and then back, the red circle/slash would be gone and the contact was not blocked or in my blocked list.
I went nuclear and deleted all previous blocked contacts on the Mac, It could be just one blocked contact that triggers the issue but I didn't have time to go through one-by-one to determine which one it might be.
Since deleting all previous blocked contacts, the blocking function works again across all of my devices.