Contact blocking is a compromise for both sides of the fence, and an ingenious way to satisfy both people who mostly play SF/KOF/etc, and those who mostly play MK. Obviously, because the former games have back for blocking, holding a block button is extremely unnatural for them. HOWEVER, players of MK are more accustomed to being able to maneuver themselves away from the opponent without block animations triggering for simply holding back as the opponent whiffs things. As such, IGAU combines these two attributes together.
This is actually REALLY huge for the footsies department of the game. Most games that have contact blocking are 3D games with VERY slow walk speeds. As a result, whiffing is huge in this game because it is just as easy to force as in MK9, but with a lot less risk for misjudging ranges or getting caught with your pants down and fingers off of blocking. It actually helps MK9 players transition to the new blocking without removing something they're totally accustomed to. Meanwhile, other players aren't caught off guard with a block button and a lack of traditional crossups. And overall, it promotes spacing a lot.
This is actually a really, really good change if you understand everything this causes.