What actually happens when you 'restrict' someone on Instagram versus blocking them?

Restrict is the quiet, drama-free option. Their comments on your posts become visible only to them unless you approve them, their DMs go to your message requests (no notification, and they can't see when you're online or if you've read it), but they can still see your posts and you stay 'connected'. They get no notification that they're restricted. Block is the nuclear option and more noticeable. Restrict is perfect for exactly your situation.

Restrict is criminally underused. It's like putting someone on mute in real life, they keep talking, you just don't have to deal with it.

For what it is worth, this behaves differently on iPhone vs Android in my experience.

If all else fails, log out and back in, it refreshes a surprising amount.

Can confirm the top answer, worked on my end too.

Worth checking your notification settings too, they quietly reset after big updates.

Restarting the phone entirely did it for me when nothing else worked.

Fully closing and reopening the app (swipe it away) fixes more than you would think.

Solved the same thing by switching between wifi and mobile data, oddly enough.

Adding to the accepted answer: results vary a bit by phone and OS version.