Before I delve into the topic, I've observed in my dozens of hours of playing in battle, siege and duel modes over the past couple weeks that the auto block hack is rare in CRPG. I would wager that 98% of the playerbase is NOT using it. If a greater % are using it, they're using it so ineptly that they might as well not have a hack at all.
How to spot an auto block hacker
If you know how it works it can be quite easy to spot. A player who holds down the defense button will automatically parry an attack as long as it's coming from within about a 120 degree cone of the direction his character is facing. If you spam feints in numerous directions and he instantaneously parries in the direction of your feint (in some cases before you've even begun your weapon swing animation!) then you can be pretty confident that you're facing a hacker. A more devious hacker will only press the defense button when he thinks an attack is not a feint, so his blocking will look more 'natural'. These types are harder to spot, but if they seem preternaturally talented at blocking yet newbish in other areas of their play style (not good at feinting, poor footwork, etc.) then that's a sign you may be facing a hacker. In addition, a hacker's feints will look 'off'; instead of the regular direction attack - parry in same direction - direction attack (AKA swing up parry up swing up) the hacker's attacks will appear to be direction attack - parry down - direction attack (swing up parry down swing up).
Another way to spot the hack is to look at the default direction of the player's parry. An auto block hacker will by default parry downwards. He is incapable of parrying to the left or right unless an attack is coming from that direction.
How to defeat an auto block hacker
The easiest way to defeat an auto block hacker is with a ranged weapon since they can't block arrows or jarids. Many people do not have this option however, and must engage the hacker in melee combat. The key to defeating the hacker in this case comes down to three variables: chambering, feinting and footwork. If you can get the hacker to draw back his weapon while you are in the middle of an attack (AKA feinting) you will be able to score a hit. If you can move around the hacker and land multiple consecutive blows which are either unblockable due to flanking or tricky to block due to their spam like nature, you will likely win. Finally, if you are skilled enough to chamberblock the hacker's blows you will undoubtedly land a kill. I know this from experience since I tested out the hack in the duel server a number of days ago and found that my dueling skills were actually DIMINISHED due to the weird way the hack interferes with feinting. Certain highly skilled players who I might go 30-40% against in duels were actually killing me MORE when I used the hack. This is a rare situation however and should not be used as evidence that the hack 'isn't a big deal' since most players are not highly skilled, and if two average players duel each other ceteris paribus the one with the autoblock hack will win 99 times out of 100.
Hopefully this write up has helped and will lead to some justified bans of the auto block hackers in CRPG.