Hey @jornes.
1.) Here you have some info about the .wp-site-blocks wrapper.
2.) Check your index template, replace the Gutenberg post content block with Cwicly’s one and move it to the root (1st level). It is placed inside a section block by default.
This should remove the 2 wrappers (it’s the section block I mentioned) between .wp-site-blocks and the post content block.
PS: The setting you mentioned does not affect anything inside your current setup. It’s for template parts.