An instance of AVCaptureVideoPreviewLayer continues to update its contents from the video capture stream even while the main thread is blocked. Is it possible to generally replicate this behaviour with a custom subclass of CALayer? In other words, given raw image data, can we update what is displayed on-screen while the main thread is blocked?
You can't update anything in the view when the main thread is blocked. The whole of UIKit is single-threaded and runs on the main event loop. Video capture is a special case because it draws directly to the screen buffer, but you won't be able to replicate it yourself.
Furthermore, if you do a long-running task on the main thread, iOS will assume your app has crashed and kill it after a few seconds anyway.
Why not perform your other task on a background thread instead? That's the standard practice.