We are currently testing restricting access to Teams to specific domains and if I add a domain(for example domain.com) to be on the blocked list in the Teams admin settings, I can as a team owner still invite a user from that domain. I was expecting the behaviour to say the domain is blocked as part of your organisation setting.
This feature is currently only in Preview and as part of an Office 365 license. You can create either an Allow list or Block list. But you can't set up both types of lists. By default, whatever domains are not in an Allow list are on a Block list, and vice versa. You can create only one policy per organization. You can update that policy with more domains, or you can delete that policy to create a new one. This list works independently from SPO allow/block list. You would need to set-up Allow/Block list for SPO if you want to restrict individual file sharing of Group connected site. This list doesn't apply to already added guest members, this will be enforced for all the guests added after the list is set-up. However, you can remove them through the script. Hope this helps.
I'm not testing this policy on production now. I hope use this steps in next Phase in Office 365 project.