Didn't know it was an option.
Blocking

Are you looking via the app, or the website?
The website. The app still appears to have this option.

It's still under settings.
It's also still available under player options, though not when a player is your friend.

I'm sorry my suggestion didn't explain the missing option. I didn't want to imply to know how it works. It seemed like a logical explanation at first glance.
Here's what I see now:
The option is still available for me, but I have no idea why. It's up to chess.com to clarify the difference. I'm noticing a difference between your profile view and mine. My best guess is that it's the difference between Beta and non-Beta. But again, this is just pure speculation on my part.
Have you removed the option to block obnoxious players?