I'm pretty sure it just doesn't send the notification that your phone is ringing to your iPhone, as can be seen if you restore/reset all settings the list is deleted.
One big test is I created an contact to block a country code (drug spammers keep calling and using Country code +7). I added it last week, with the phone number listed as "+7" and have yet to receive a call. Lets hope it works. ATT told me there was nothing they could do but change my number - I have had this number for over 10 years, so thats not an option at this point.