It is important to note that this method only works with blocks that can be moved by pistons, there can still be items loss from items getting stuck and then blown up and in minecraft 1.14(Java) even a normal TNT blast drops all blocks it broke as items.
Blocks cannot just exist outside the block grid. However pistons appear to do this all the time. Actually, the blocks to be pushed are deleted, then moving piston are placed at the destination, then play the animation of blocks moving to give a sense of blocks moving.
This block has some interesting properties. It has a blast resistance of 0, and can't be broken by tools, but it can be broken by explosion, after that it will drop the same things the block it replaces would drop if broken by explosions, however with a 100% chance. Thus, blowing up a moving block greatly increase efficiency.
Since 19w11a, the usefulness of blast chamber is largely reduced - items destroyed by TNT now always drop regardless of movement. Motion still reduces blast resistance of blocks though, so the classic blast chamber design yields more blocks broken per TNT. It may also be still beneficial with other explosion sources - Withers, Ghasts etc.