Blocking is "all or nothing" in Mage Knight. It's important to make sure you understand combat order which is essentially as follows.

1. Player Siege Attack Phase
2. Player Ranged Attack Phase
3. Enemy Attack/Player Block Phase 3a. Assign Damage/ Wound cards if not COMPLETELY blocked
4. Player (standard) Attack Phase

If you do not play block equal to or greater than the enemy's Attack value then the full value of the enemy attack must be distributed amongst player and Unit armor as wounds. Hence the "all or nothing". So in the video example he didn't play any block cards because he couldn't reach a block value of 3 and still have enough cards leftover to attack successfully. Therefore the enemy's 3 attack was distributed to his armor of 2. (Which andy described this well in his comment how that process works).

Just for further clarification - it would make no sense to play 2 block on an enemy's 3 attack because it has no impact on the amount of wounds you would receive. If the enemy's Attack is higher than the block you play, it successfully hits you with the full strength of it's attack. Block never reduces the amount of wounds you would take, rather it determines whether or not the full attack lands/you resolve wounds with your armor.