Production of LH, the hormone that causes the testes to produce testosterone, is partly inhibited by normal estrogen levels, and moreso by higher estrogen levels. Blocking this action results in more LH which yields more testosterone.
The idea that estrogen not binding to receptors would result in detectably higher blood estrogen levels is not correct. The number of receptors is absolutely trivial compared to the number of estrogen (principally estradiol and estrone) molecules present in the blood. Thus, receptor binding does not at all substantially change the amount present in the blood (by that mechanism.)
Estrogen is produced from testosterone and not because of perceived "need" but based on the amount of testosterone and the amount of aromatase enzyme.