Mushrooms grow in damp places and compressed peat, which is what your soil block is, comes from bogs.
The mudshrooms grow from finger like threads under the soil. The part you see is the fruiting part that will eventually send out spores to reproduce. They will depleat the nutrients your plants need.

You are right to pick off the Mushrooms. You can get rid of them with a fungicide. However if your plants are that big, I'd be tempted to transplant into other soil and ditch the mushroom one

Fungi have the ability to break down woody material. This leaves behind material that can be broken down by the soil bacteria. It is these materials that are not only nutrients for the bacteria but are also nutrients for plants.

This phenomena can be seen in fairy rings. The grass near the mushroom ring is greener than the other grass. More nutrients available to the grass where the fungus is breaking down the woody material.

Here is a link that might be useful: Fairy Ring