[7]
ignore-groups=owner,admin
on-use=deny,tell,log,kick

For some reason it only denies the person placement of the block. Doesn't tell, log, or kick.

Herp derp. Well I guess I'll reaffirm this bug: the block is still in the players inventory after the kick. Also in your INSTALL.txt file you might also put "copy worldguard-blacklist.txt into the root of your server"

I bit more info:

I tried to change a few settings reload the plugin and now the block is not even disappearing. Also [7] and the ignore line are on separate lines.

Try on-create.

If you want to deny the ability to have an item, you have to use on-acquire as well.