Monkey likes wurds and the analysis thereof. Pardon a bit of OT.
I agree that within the app it is quite clear, and even in the FAQ (about which I've got no complaint) the terms allow-selected and block-selected are used so people should not get lost there either.
It seems that your logic for the terms blacklist and whitelist is similar to mine. By that model; the selected items are exceptions from the default blacklist. By the alternate terminology for the same allow-selected mode where blacklist and whitelist are inverted then the selected items are the whitelist itself. I'm finding it easy to make logical arguments for each combination as either of them can be made to sound reasonable.
To your point, It's a good thing we have allow-selected and block-selected.