What does this mean for Lemmy instances and the practice of blocking and banning users and instances?
Nothing at all.
From the text of the bill:
This chapter applies only to a social media platform that functionally has more than 50 million active users in the United States in a calendar month.
Lemmy doesn't have that many users, and if we're being honest, probably never will. So this unbelievably stupid and bad law doesn't apply, and isn't likely to in the future.
Hopefully it's struck down, though I wouldn't count on anything reasonable or logical coming from the ghouls on the Supreme Court these days.