On one forum, someone wrote that detecting who blocked you is possible. I tested it and it really works
The method is quite simple and easy.
Right click on any contact who you suspect about at Contact List, and View>Profile. When his/her profile is opened;
if you see one picture box (contact's profile picture), like the picture below,
then that means you are blocked not allowed.
if you see two picture boxes like the picture below (or if a tooltip appears on a picture box and says "Display picture" when you hover on)
then that means nothing, you may still be blocked or allowed.
I reported this problem to Windows Live team, please you too report it:
https://feedback.live.com/eform.aspx?productkey=wlmessenger and/or
https://feedback.live.com/eform.aspx?productkey=wlspaces
The simple solution that I can think is adding "Noone" option to the permissions list of Messenger View part of Windows Live Profile. So people who can't see Messenger information of contacts can't be sure if they are blocked or not due to the existence of that option.
Also you must apply these steps in order not to compromise your privacy:
Sign in on Messenger > Go to Options > Click on "Edit Profile" button at
Personal tab. Select
"Everyone" for the permissions of your Messenger view on the page opened. Now everyone who visits your profile will see your Messenger view, however your blocked contacts can't get the situation.
If you find something wrong with this method, please post it here.