Observe — it's acceptable to block fool (4,2)
I believe the answer is:
look on
'observe' is the definition.
(thesaurus)
'acceptable to block fool' is the wordplay.
'acceptable' becomes 'OK' (OK can mean acceptable or fine).
'to block' indicates putting letters inside (block can mean to fill a hole in something).
'fool' becomes 'loon' (I've seen this before).
'ok' placed into 'loon' is 'LOOK ON'.
'it's' acts as a link.
(Other definitions for look on that I've seen before include "Watch without getting involved" , "Watch as observer - dont get involved" , "Stand by watching, observe" , "Watch without becoming involved" , "Be a spectator, observe" .)