When an IP is blocked, the underlying user cannot create accounts if they have the ipblock-exempt right (incl sysops)
From my test-wiki (just cloned from gerrit):
https://i.imgur.com/3DKnyq1.png - Blocked w/o sysop
https://i.imgur.com/aDeEwmR.png - Blocked with sysop
https://i.imgur.com/iaKvsk4.png - Block options
Only block option was account creation disabled. Tested IPv4 and IPv6 blocks. Tested range and directed blocks.
More info: https://en.wikipedia.org/wiki/Wikipedia:Administrators%27_noticeboard/Archive297#All_user_accounts_are_restricted_from_account_creation_while_doing_so_from_a_blocked_IP_or_range