Hi Bruce;
That is an excellent question and probably a big misconception in PB/DB-Land!
You have to remember that the real DB client driver is the one that is handling the DB data packetization on both sides of the C/S fence. PB's DB driver is not the one doing that .. in fact, the PB DB driver ( for example PBSNC125.dll) is really only an "interface" to the real DB client driver that the DBMS vendor or 3rd party provided.
So... many things that you put in the SQLCA.DBParm or other SQLCA settings are really just "passed through" to the real DB driver from PB's "interface" driver. Thus, when the blocking eature you refer to is activated its actually implemented at the real DB driver level - then, the PB interface DB driver runs a FETCH on that buffer to get it into the PB application.
FYI: Just run a PB SQL Trace and a DB Driver SQL trace and you will see what I mean. 
HTH
Regards ... Chris