The Blur option is just a variant of the virtual background options, and is directly controlled by the Virtual Background setting.
Meet the system requirements for Virtual Background.Prerequisites for using blurred background It's great for hiding a cluttered dorm room, taking a meeting in a coffee shop, or just keeping things professional. This option simply blurs the background of your video, obscuring exactly who or what is behind you. When a custom virtual background is unavailable or not suiting your needs, but you still want to maintain some privacy with regards to your surroundings, the blur background option can be a great alternative.