@Carmela-And-Jim0 This is a really interesting question, and I'd really like to know the definitive answer. There are no direct penalties, per se, but in my experience, there IS a downside/backdoor penalty. I have a vacation home in a resort that's only open for 6 months of the year, so I block my calendar for the other 6 months when it's closed so I don't waste potential guests' time. Not all of the hosts in the resort are as responsible, and they leave their calendars open and just don't allow instant booking. I have noticed that my listing has a very poor ranking, even though my stats are great and I'm a Superhost (due to the performance of my primary listing). As a result, I have almost no bookings for my resort property through Airbnb. In contrast, my primary listing, which has no blocked days, performs amazingly well: I'm ranked #2 out of approximately 300 local listings.
I don't have any concrete evidence directly from Airbnb to show that blocking dates affects performance, but I think it does based on my experience. Make of that what you will.
Another annoyance associated with blocking off so much time is that I'm CONSTANTLY receiving messages from Airbnb to unblock my days.