>backups are only done in whole-file increments, not at a block level

OP seems to refer to how the Time Machine destination backup file is chunked when using a sparsebundle, such that individual chunks can be updated in isolation, which is how Time Machine came to support network backups. Previously, Time Machine's destination file was a monolithic disk image that had to be updated in whole, which would be unrealistic for network backups.

At a filesystem level, a sparsebundle is just a directory and the chunks are individual data files, which the OS coalesces into a single logical file. Sparsebundles appear as individual "files" in the Finder but you can right click to see the individual chunk files. A sparsebundle is effectively a "blob" as GP states, since it is designed to contain arbitrary data, and since it's implemented with the most rudimentary filesystem components it works across platforms as GP also states.

But when discussing network transfers it makes sense to think if it as a simple collection files rather than a "blob." (OP describes the chunks as "blocks" but that implies hard drive blocks which is not the case.)

Sparse Bundles were always chunked (and introduced at the same time as TimeMachine). Sparse Images were single file, but could grow to accommodate additional data. IIRC, networked TimeMachine backups (say, to a TimeCapsule) always have used sparse bundles.