What problem does this address?

In order to exclude a particular category or tag from the Query Loop block, one must manually add all other categories/tags to the block, leaving the "excluded" option out. This is time consuming and laborious, and would be a better experience to have the option to exclude by taxonomy as well as include.

Related discussion found here: #30706 (comment)
Requested here: Automattic/wp-calypso#80362

What is your proposed solution?

Adding an 'exclude' option in the Options menu of the Block Settings > Filters modal could add this feature without adding more UI to the default interface.