The format block in Splunk SOAR is utilized to construct text strings by merging static text with dynamic values, which can then be used for both input to other playbook blocks and output for reports, emails, or other forms of communication. This capability is essential for customizing messages, commands, or data processing tasks within a playbook, allowing for the dynamic insertion of variable data into predefined text templates. This feature enhances the playbook's ability to present information clearly and to execute actions that require specific parameter formats.