Using Orlando as an example, when we owned Orlando weeks some Orlando area resorts would not allow us to exchange into them. Others would. I did a lot of searches with Orlando and non-Orlando weeks and it made a big difference.
In addition to what Madge has said about wanting to find better prospects, another reason for the block is to prevent someone from buying at an inexpensive, inferior resort and then trading into a nicer resort in the same area.
II has a similar Regional Block. Their's was so restrictive that if they had you in their records as an Orlando owner, they even blocked you from Orlando Getaways. So, with them it was an exchange company policy. I got them to change that if you also owned something else outside of the Orlando area.
Hope this wasn't too much idle chatter.