The idea is that this encourages people to go to their local football team instead of watching the game on TV.
For a small island, there are massive amount of football teams. If you're American you're probably only familiar with the 'Premier League' with teams like Manchester United/City, Arsenal, Chelsea etc. and maybe the Scottish Premier League with Celtic and Rangers, and maybe Championship thanks to 'Welcome to Wrexham' but there are leagues and leagues below, it goes very deep until you get to teams literally just playing on a bit of grass behind a church in a small village and the local gym teacher being the referee.
The blackout is supposed to mean you go to whatever team is nearest or easiest to get to for you, going to big team Premier League games is very expensive if not impossible unless you have silly money to spend or wait years (I mean like 10+ years for a season ticket).
But it doesn't really work for a lot of people. If you moved away for university etc. you might still want to watch your team but the only local team is your team's rival. Or you would end up watching the village football team game.
Most games are aired abroad for expats and foreign fans, but UK residents are unable to watch those legally, hence the growth in fire sticks.
I'm British, but having never been into football (or any sport really) I wasn't aware of this TV blackout; given what I do know of people who don't necessarily support the local team, this sounds like madness, also how does this work for away games? I know loads of people who live/work in London now who still support their home town team.
So, to make sure I understand this correctly; if I wanted to watch a particular team, say my local one, without going to the game, there is no actual legit way to watch that match from home?
I suspect your London friends are using VPNs and/or illegal streams, or simply just following scores or watching watchalongs, Soccer Saturday etc.
Games outwith the Saturday blackout can be watched legally, bigger teams usually on TV or via club streaming services. Games are often scheduled at lunchtime and after 6pm to allow them to be aired on TV on Saturday.
Some 3pm games have started to air on trial.