what does block all communication do on steam?

10 Things Only STEAM Users Deal With

To specifically answer your question at hand, blocking someone will make it so you appear offline to them. No notifications are sent regarding your status or game-playing. They WILL still be on your friends list (and you’ll be on their list), so you have easy access to unblock them at any time.

Steam: How to Add / Remove Friends. And Block Annoying Users

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