Okay, lets say you have Bob's Enemies, which adds a bunch of new NPCs to do battle with, and Alice's Dungeons, which adds new dungeons to explore, but it turns out ASIS breaks Alice's Dungeon's Quests.

Now, your first impulse might be to simply put Alice's Dungeons.esp into blocklist.txt, but it turns out this is a bad idea, because it stops the ASIS patcher from even looking at Alice's Dungeons.esp.

Why is this bad? If Alice's Dungeon.esp uses vanilla leveled lists, you'll still get quest-breaking additional spawns, and because Alice's Dungeon.esp is in blocklist.esp, ASIS has no way of preventing this.

What you should do is: Add the FormIDs of the cells of Alice's Dungeon.esp to the Cell Exclusion of AutomaticSpawns.ini and IncreasedSpawns.ini, but if Alice's Dungeon.esp is in blocklist.txt, it wont matter because Alice' Dungeon.esp will never be processed.

This is just the simplest example could think of. Another possible example if you have, say, Chad's Spell's.esp and Chad's Spell's Retouched.esp which has Chad's Spells.esp as a master. If the Retouched mod is blocklisted, ASIS will process the data from Chad's Spells.esp without taking any changes from Retouched into account.

Where possible, you should block things that need to be blocked individually.

EDIT: after showing Dienes this article, he had this to say: