Active Blocking
Blocking has always been a very deliberate action in the Mortal Kombat series thanks to the presence of the Block button. Unlike other Fighting Games, where holding Back or Down/Back on the controller will defend you from attacks, you must be very conscious of your defense because you have to actively maintain a defensive stance by holding the Block button. There will be no automatic blocking when you are holding back to walk backwards and end up blocking projectiles, for example.
A Chip Off the Old Block
Holding Block, however, puts you at a huge disadvantage for many reasons. First off, while holding Block, you cannot perform any actions at all. The only thing you can do is to switch from standing to crouching. But otherwise, you cannot attack, you cannot move, you cannot jump, you cannot dash... nothing. You're stuck in place until you let go of the Block button.
The second main disadvantage of remaining in block is that every attack you block causes Chip Damage, and you will be K.O.'ed if the Chip Damage is enough to drain whatever is left in your Life Meter. Most moves, at the highest, will do about 2% damage when blocked, but many of the weaker attacks will do 1%. Even crouching Front Kick will do the smallest of Chip Damage even though it's almost impossible to see.
Finally, the last main disadvantage of being too defensive and blocking too much is that your opponent gains X-Ray Meter whenever you block attacks! So by being too defensive, you'll end up giving your opponent access to many more Enhanced Special Attacks and Breakers and such.
So it actually becomes imperative to learn how to not rely on blocking as a crutch, and learn how to play more risky and try to avoid moves more often or to remain on the offense. Blocking should be a last resort.
Block This Way
When you are blocking, you still have to make sure you are blocking high or low properly. If you are blocking high and the opponent attacks with a low hitting move, you will get hit despite holding the Block button. However, unlike many other Fighting Games, you do not have to concern yourself with blocking left or right. If your opponent jumps over you and attacks, you will block the proper direction no matter what.
Block Strings
Once you Block an attack, you are rendered "stuck" in Block Stun. If another attack connects on your character before you end your Block Stun, you will again be put into Block Stun and forced to Block again. Moves that you have to continue blocking against are called "True Block Strings."
However, just because you are forced to block an attack does not mean you are safe and can let go of the Block button. At any point during an attack sequence, even if it's one that has no gaps in it, if you let go of the Block button you will get hit. So you are "forced" to block a Block String in concept only. You CAN let you if you want, but you will get hit. So blocking is the only course of action you can take to minimize damage.
Many attacks also cause a lot of push back when blocked. Uppercuts, for example, will cause characters to stagger back upon block. However, many moves that are a part of a Kombo Attack cause very little pushback. Usually, it's only the final hit of a Kombo Attack string that causes any sort of pushback when they are blocked. But if you cut the Kombo Attack short, you will remain in pretty close quarters in relation to your opponent.