
Yes. It “blocks” the user. Afaik it should prevent the banned user from interacting with communities from the instance they were banned from and also the instance will no longer accept any new interactions from the user (local users cant see new content of that user, like PMs, comments, etc.)
Additionally, their content can also be removed, but that is optional.
Go to your inbox > messages and then click on “All”, which is beside “Unread”.
You will see both outgoing and incoming PMs.