A block instance is (basically) made up of a collection of geometry, which is shared by other block instances, and a transformation.
There are certain 4x4 transformations that require the underlying geometry to be significantly modified in order for the transformation to be successful. Generally, this involves convert non-NURBS geometry into NURBS geometry. Modifying the underlying geometry of block instances is frowned upon. Thus, you get the message with is the basis of this thread.
Hope this helps.