To answer your questions:
Sometimes you delete people without blocking them because you don't want to have them on your list, but don't mind them talking to you.
Also, it IS a server problem and the information on who's in your "Network" bares no relevance to who is on your WLM contact list. The problem exists because the information is no longer being sent/received as the features looks to be being removed from the new version of WLM.
It should only affect recently added/removed contacts as the data has already been received for the others. It's nothing to do with the add-on, it's to do with the servers. Even the lists within Messenger (which are there, just harder to find), don't reflect this data, the same goes for indicators on other Messenger clients (such as for Mac).
Basically, the data there cannot be trusted one way or the other and all you can do is wait and see whether the feature is put back in to WLM 2010, in which case the servers should start sending/receiving that data again.....but that looks highly unlikely so far
Also, please refrain from double posting, instead, use the "Edit" button to add information to your post