Clarification on the blocklist regarding users

A part that isn’t really clear to me is how the blocklist actually works when user names are on it.

An existing user on that list won’t be able to log in. This seems to be the only use case to me. Non-existing users can’t log in either way. And trying to log in as a non-existing user won’t result in anything like the IP getting blocked. That last point being the case would be the only thing I could see making sense, but as said, that isn’t the case. So is it really just a way to perma-block existing users?

PS: Don’t get me wrong, I like the plugin, it’s just the blocklist for usernames I can’t figure out ??