Having a distro block with a higher current output than input is the same thing as just using too small of wire in general.
Like powering a 2000W amp with 12ga or something.
Sure it might not always cause damage, depending on how severe the difference is it might not even do much at all. But there is a number of things it could do.
Suppose you had one 1/0 in and two 1/0 gauge out, each hooked to a very powerful amplifier. When both of the amps simultaneously draw maximum current, all the of the power is expected to flow through the single wire. Assuming you fused properly not much should happen other than you blow a fuse and both amps turn off. You are ignorant so lets say you then put a fuse on the wire that passes twice the amount of current it should so that both amps could draw what they needed. Now you have a single 1/0 ga wire pushing double it's rated current carrying capacity through it. That causes the wire to heat up, melt the jacket, touch the bare metal chassis of the vehicle, and create a temporary welder before the fuse blows. Never a good thing...
Now obviously that's the worst case scenario, and the bigger the difference in wire sizes is the more severe the effect is, but it's never a good idea to do it.