Does blocking npm install scripts stop this kind of attack?
No. Microsoft reports the payload executed at module-load (import/require) time rather than through an install script, so npm install --ignore-scripts — and even script-blocking defaults — would not have stopped it, because the malicious code only runs once a package is actually used in application code.
Answered in
A Misconfigured GitHub Action Backdoored Packages With 3M Weekly DownloadsA pull_request_target flaw in AsyncAPI's CI let attackers steal a token and trojan 4 npm packages — 3M+ weekly downloads — with credential-stealing code.
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