Processes in Microsoft 365 for setting up Office apps, redeeming product keys, and activating licenses.
If you logged into this link (https://setup.office.com/Home?wa=wsignin1.0) with your Microsoft account and entered the Office product key there to link the Office licence to your Microsoft account, if you are sure you entered the correct product key and you were informed the product key is blocked, then there is something wrong with the Office licence you were sold.
What version of Office did you purchase, is that Office 2021 Home, Office 2021 Pro Plus or some other version, and where did you purchase the Office licence, was that from an online retailer.