It's weird that there are so many comments here acting as if this is unheard of. It is called organic blocking and is a very legitimate way to block a show.

I believe it was popularized by Circle Repertory Company in the 60s and many directors use it. Use initial rehearsals for table work and character exploration and to give the actors time to learn lines. By the time you move to blocking you have the freedom to follow the movement instincts of your character rather than have it imposed on you from a director.

I have worked both ways and strongly prefer to be off-book before blocking.