It sounds like they serve totally different purposes, where one is a server-side tool to improve security, and the other is a client-side tool to improve privacy.
Note that the definition of "Block 3rd party cookies" in Safari is different from the one in Firefox (not sure about Chrome). Firefox blocks a lot more stuff when that option is enabled in Firefox than Safari does when its option is enabled, which causes more web compat problems.
Blocking 3rd party cookies causes very few problems. I've blocked them for many years and have seen fewer than 10 sites it caused problems with. For those you can whitelist the domain.
My experience has been the opposite. It breaks every Amazon Pay integration and a lot of Paypal integrations as well. It also breaks online banking for the two credit unions I use, both of which seem to use some 3rd party service to run their backends. And then just whitelisting the domain isn't a great solution because then that means they can drop any 3rd party cookies, not just the desirable ones. So suddenly my online banking works, but now I've got google trackers and whatever other crap they want to drop. I believe I was able to whitelist just those cookies but that was quite a few versions ago and the interface is different now so I can't find where I did it. The cookie interface is really terribe; when you go to the site information it tells you whether the site is storing any cookies, and many times it says "No" but if you click the "view cookies" link it shows a ton of them. This happens when the domain doesn't match exactly (for example www.example.com vs example.com) so you can't really trust the Yes|No info box.
It really depends. I, too, have been blocking them for years, with few problems. But other people run into problems more often. It really depends on the sites one uses.