As in the question. Wouldn't
cat /dev/random decrease the entropy estimate until it blocks, which forces the random device to block for all applications on the current system?
Yes it would. The blocking random device reads from a single entropy pool and blocks when the entropy estimate goes under a configurable threshold. At this point, any reads from the character device will block, regardless of who is reading. This is just one of many reasons why developers should instead use the non-blocking device or the
getrandom() syscall instead.