A better question is does anyone apply the reduction to shearwall capacity when
the studs and sills are green? I've heard both Dan Dolan (a notorious
"liberalizer" from Virginia Tech) and Buddy Showalter opine that we should, but
I've never seen anyone do it.
As to flat blocking, visualize the sheathing as a diagonal tension field. The
blocks don't rotate so they don't need a tight fit, but they are in cross grain
tension. The deeper the section the less the tendency to split.
Unfortunately, I haven't seen any test data on either issue.