When blocking communities, they will not show up in your “all” feed anymore. This makes browsing Lemmy nicer especially now that you might not subscribed to a lot of communities.
In the browser: In you Lemmy instance, click on your username (right upper corner), “Settings” and open the tab “Blocks” and type in the community you would like to block. Here you can also unblock communities
On Jerboa (Android): Open the community you would like to block, click on the 3 dotted menu (right upper corner) and click “Block Community”. Note: you can not unblock on Jerboa. Use the browser (Settings -> Blocks) to unblock.
On mobile I’m usually browsing subscribed communities, on desktop I’m exploring new ones. No idea why, just turned out that way for the time being.
Good point with the not displaying vs. not fetching! I’m using my private phone for work with a second SIM, so that’s not an issue here, but it might certainly be for others. I’d expect the filter to fully ignore NSFW, but with an app in its alpha stage, you never know just how things are implemented early on.