They seem to be using the
Offline Blocker 2.0 script. It blocks contacts as soon as they go offline and then unblocks them when they appear online again.
Edit:
So when you block him/her it makes you appear offline to him/her so the script blocks you then when you unblock him/her you become online again to him/her so the script unblocks you.
I used alot of him/her 
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