Disclaimer: the following is solely for the purpose of coming up with a suitable solution, it's not my intention to disrespect people with what I'm about to say, I always try to be as objective as I can be; for this is neither the time nor place to settle personal scores.
There's a whole lot of confusing stuff going on in this thread, so let me start by addressing the issue that's most confusing to me: the name change.
I'm very well liked and nobody has ever /ignored me, so I might not fully comprehend the deeper dark meaning behind that word, but to me it sounds like 'ignore' is the least harsh word out of the three of them. 'Mute', a term that's already used elsewhere (which might cause some confusion) means you're unable to speak, so muting one is to take away their ability to speak, if someone is being 'blocked' it means they're being stopped from doing something; both of names sound harsh to me, since they imply to strip the recipient of features they're accustomed to. 'ignoring', however, doesn't appear to do such a thing... well, at least to me it doesn't. But like I said, I don't understand why merely changing the name of the exact same command would lessen the emotional impact, so if you could please explain that, it would certainly help.
To briefly go over the rest:
I'm all for reintroducing a temporary ignore command.
If someone wants to appeal their ignore, the most reasonable way to do so (according to myself) is if there was a section for it on the Community Watch.