2) Settings/General/Email (tab)/Email extension settings/Manage blocked IP addresses
What is the difference? I assume there must be a difference, as the two are not in sync.
When we added an IP address by method 1 it would still track our own email opens, despite our IP address being listed. Once we also added the IP address by method 2 this stopped.
The first setting is referring to your traffic analytics. In these analytics, you might want to exclude certain traffic, such as such as internal traffic, referrer domains, and bots. You can learn more about this here: Exclude traffic from your site analytics
The second setting relates specifically to the HubSpot Sales extension. By default, this extension will show you notifications for all opens and clicks of sales emails that are registered, including your own. This setting lets you block certain IP addresses so that the likelihood of seeing notifications from anyone else than the actual recipient are lower. You can learn more about this here: Manage your HubSpot Sales extension settings