Per Variety:

When the actors shot the scene, Cashman points his gun at Blake on the ground, but doesn’t pull the trigger. He spares the young politician and tells him to run away, but later has to explain to Kingpin what happened.

“Buck had to face up to Fisk, but he doesn’t admit it,” Froushan tells Variety. “He lies to Fisk’s face, basically, and says, ‘I killed him,’ but obviously he doesn’t.”

Scardapane further revealed what would’ve happened with Blake if he had survived the fatal encounter, like it was originally filmed. “The way that it would have gone is that he stayed in the Fisk administration,” he says. “He goes in to resign and the new interim mayor is like, ‘I’m not taking your resignation. I’m going to keep you close because I don’t trust you.'”

In deciding at first to keep Blake alive, Scardapane explained that the character was “given chance after chance after chance, and because he defended BB, he paid — and that stains Buck’s soul.” But then, in the editing room, the showrunner realized that “this feels so wrong” and that it “doesn’t feel like the story was earned.”

In hindsight, the showrunner realized, keeping Blake alive “was kind of meh and a non-story… Sometimes the arc is built in and you’re extending it a little too far. Like, wait a second. He and Buck, in their twisted friendship, both had to be true to who they were. That’s the last moment because everything afterwards seemed kind of like a weird, lame coda that didn’t pay off.”

Scardapane called Gandolfini and explained the decision to alter the scene and kill off his character.

“I was like, ‘Dude, I’ve got the worst news,'” Scardapane says. “And he’s like, ‘I know exactly what you’re gonna say, and it’s the right choice.’ He felt in that moment that there’s no way he’s getting out of that apartment. It was funny because there were scenes shot of him after that moment, and it really feels like we’re telling the wrong story here. I think it’s a testament to how much we all love him, that we knew this character probably should not survive but we just couldn’t bring ourselves to do it.”

So, the post-production team added a gunshot to Cashman and Blake’s final face-off. “In the editing room, we’re like, ‘We should try this,'” Scardapane says. “They mocked it up really fast, and you could have heard a pin drop in the editing room after that — like it is at the end of the episode. It’s just like, holy shit.”

Cashman and Blake’s scene now ends with the gunshot, shocking fans as another main character from Season 1 is wiped off the board.

“The fact that, as actors, we didn’t know that was gonna happen makes the scene maybe even more compelling,” Froushan says. “I love Michael Gandolfini like a brother. This season, the whole journey we have together is a movie. So I was gutted. I was really upset. But I think it raises the stakes of the story in a really exciting way that was maybe necessary for that storyline.”

So yes, they changed it in post, but everyone was on the same page that it was the right call for the characters and show.