I heard a few months back that Ripple enabled users to set their account to block other accounts from holding their IOUs. A feature probably aimed at Gateways to be able to freeze balances of blocked users and so forth. I am wondering, is there a documentation and a step-by-step guide for this functionality available anywhere?
You seem to start out describing the "Authorized Accounts" feature of Ripple, but then you then pivot to freezing.
Authorized accounts which allows an issuer to explicitly approve which accounts may hold his issuances. The feature is described here: https://wiki.ripple.com/Authorized_accounts.
The "freeze" feature Ripple allows issuers either globally freeze all their issued funds or to freeze funds issued to a particular user. Frozen funds may only be sent back to the issuer. The feature is described here: https://wiki.ripple.com/Freeze.