This form is displayed from the Block - Layers to Blocks tool.
All of the drawing layers are displayed in the left-hand list. Select the ones that you wish to convert to blocks, move them across to the right-hand list and press OK.
A new block will be created from each of the selected layers, and any layer insertions of those layers will be converted to block insertions. The block name will be made unique by adding _1 etc. The layers themselves will be unaffected.
Layers to Blocks