Hi juggie,
welcome to the forum.
The answer is Yes and No 
Yes: it will block other extension tasks for the same clientID, so it is very recommended to not block in any callback that you register in your extension.
No: It does not block another client to authenticate, authorise or call the lifecycle event listener. BUT if too many clients run into the same issue that their threads are blocked, then no more extension tasks can be executed. Same advice don’t block 
Regards
Flo