It is technically allowed but is considered bad adminship. With the rollout of UCP, Fandom is also working on rolling out a new process to combat bad adminship.
Even though this process is not yet complete, the specific case of users getting blocked on wikis they don't contribute to is something staff have already been dealing with for a while. I don't know the full requirements, but, under some circumstances, staff may revert the blocks. If you want them to consider this, you will need to contact staff.
That said, I don't see what the big deal is. If you neither have nor plan to contribute to the wiki, what is the issue with being blocked on it?
That is what is supposed to happen. I don't recall which thread but on one similar to this someone else said that staff don't always do their due diligence with this respect. They claimed it was because of a flood of newer, inexperienced staff doing the reviews. However, if this does happen, you should be able to contact the staff and have them re-evaluate the decision.