Explanation

The Blocked User list is used to block specific users from being able to receive Multi-Factor Authentication requests. Any authentication attempts for blocked users are automatically denied. Users remain blocked for 90 days from the time that they are blocked.
Box 1: Yes
133.107.10.20 is in the Montreal named location. The conditional access policy excludes Montreal so the policy does not apply. Therefore, User1 can access Microsoft Office 365.
Box 2: No
193.77.10.15 is in the Toronto named location. The conditional access policy applies to Group1 which User1 is a member of and all locations except for Montreal. Therefore, the conditional access policy applies in this case. The policy requires MFA but User1 is on the MFA blocked list so he is unable to use MFA. Therefore, User1 cannot access Microsoft 365.
Box 3: Yes
User2 is in Group1 and Group2. The conditional access policy applies to Group1 but excludes Group2.
Therefore, the conditional access policy does not apply in this case so User2 can access Microsoft Office 365.
Reference:
https://docs.microsoft.com/en-us/azure/active-directory/authentication/howto-mfa-mfasettings