There’s no real “recommendation algorithm” here. Mastodon 4.x has a “trending” feature, but that’s it.
Users that your instance members follow have their content pushed to your instance, and their repeated posts reach your instance too. When content reaches your instance, you can reblog it to help it reach your followers’ instances.
Federation is a privilege. If “Instance A” members repeat or reply to “Instance B” members, they increase Instance B’s reach. If Instance B starts using that reach for e.g. harassment: Instance A may revoke that privilege with a block, and members may make a FediBlock post to alert other moderators on other instances so they too may suspend Instance B. This reduces Instance B’s reach, protecting the people Instance B was harming.
The Fediverse doesn’t have a “moderation committee”. Volunteer admins and moderators are supposed to moderate their own instances. When an instance is not moderated, it’s not other instances’ moderators’ jobs to moderate that instance. Instead, they just silence or block the instance.
Hopefully that explains why people use the FediBlock hashtag.