User within Company, Sign-in Blocked - Adding into Sharepoint Error

If a user within the company has their sign-in blocked, when marking down that user's account within a SharePoint page, would the error "Your organization's policies do not allow you to share with these users" appear?

I believe so, but wanted confirmation from others as well.

I think because this users account has sign-in blocked status, O365 is taking it as this user is outside the organization, even though this user is in organization.