It isn't possible to send anther user a thank you when the user is blocked. However, I think it is helpful when blocked users – unless their block is indefinitely – can thank othe users for edits the latter made.
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This is intentional, it's one of the (many) things blocked users are not allowed to do, to prevent abuse.
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Agreed. This is intentional, and should be. Case in point: https://en.wikipedia.org/wiki/Special:Log?user=Seeittoo&wpfilters[]=thanks
Someone I just blocked for intentionally abusing the 'thanks' button...