There is no difference between Hive Watcher's blacklist and a normal user blacklist. But Hive Watcher might use their own blacklist not the Hive blacklist.
If you blacklist any user, there is no loss to that user. What happens is next time you see that user's posts or comment you will see a red number next to their name to remind you that you blacklisted them or they are blacklisted by someone you have followed the blacklist. For example, I've done a little demo, I added @steemulant to my blacklist for test and when I go to one of its posts, I see the red number 1 telling it's in my blacklist.
The Hive blacklist is just for you to maintain your own blacklist. Instead of having your own blacklist, you can also follow someone else's blacklist. For example if you trust Hive Watchers, you can follow their blacklist and you will know who is blacklisted by them. This is useful because maybe someone you don't know is a spammer or a phisher trying to steal your password, if you see that red number near their username, then you know they were blacklisted and you will be more careful.