if gmail could just randomly decide to stop receiving emails from outlook addresses and there’s nothing any user can do about it
This is the case right now.
There’s good reasons GMail doesn’t do that, but there’s absolutely nothing technical preventing from doing that, and I can’t think of anything that legally prevents them from doing that.
“users will be frustated and leave” exactly the same thing can happen to an instance that adds an instance (or wildcard domain) block. I’d be very surprised if no instance has ever rolled back a block.
Users don’t need to worry about instance blocks on ActivityPub, any more than they have to worry about DNS RBLs for email.