That is the behaviour I’d expect.

Why? When a user blocks a whole instance generally but then specifically subscribes to a particular community on that instance, why would you expect the subscribed community to be empty?

But I guess a relatively easy fix would be to unsubscribe a user from all communities on an instance when it is blocked (and then prevent subscribing to them in the future).

Indeed if you have a false advertising scenario, there are two possible fixes:

1. change the ad to be truthful; or
2. implement what the ad claims

You seem simultaneously acknowledge that there is a deception but that you would expect it? It’s like saying you expect the design to be sloppy. In any case, what you suggest would be one possible fix to the problem. But if implementing that fix, it should go further and inform the user of subscribed communities that will be unsubscribed along with an option to back out of it to prevent data loss.