Can confirm. This is something players have been complaining about for years. Blacklist only prevents said players from having a dialogue with you and that's it.

You can even still land in instances with players on your B-list. I've had this happen after B-listing troll in Palace of the Dead, only to be queued in with him on the next set of floors! So, if you feel the need to jump servers to get distance, you'd have to jump whole datacenters.

It's a bit crazy how badly implemented it is.