I suggest “reservedEntityIds” instead, which I think reflects the usage of this setting more accurately: the listed entity IDs are (usually) not blocked altogether, just reserved for manual creation by the wiki administrator(s).
One question to be decided: to what extent do we announce this? Does this fall under the stable interface policy? Do we notify wikidata-l, wikidata-tech-l, and/or wikibase-l? (I sort of don’t want to bother too many people with this, because as far as I understand, this isn’t usually a setting you need to keep around forever, just for the initial setup phase.)
Wikibase PHP code is not considered a stable interface.
I don't think this needs an announcement, and I suspect the usage of this setting in the wild (for other wikibases) is 0.
If someone wants to make the commit changing the name of the option I'll be more than happy to merge it without bothering anyone else :)