Solution:
There is no feature available to filter the view by parent taxonomy as the thing is that - you can add the frontend filters to your view/block-view for the post type to which the view/block-view is set to query.
The workaround would be - what if you add the same taxonomy to your child posts, so, when the parent post is get saved/updated, you need to assign the same taxonomy terms to your child posts. Then you can add the taxonomy frontend filter for your child post type.
I cannot select one of my posts of a CPT to use as the ‘demo’ data that gets displayed when editing in blocks mode.
Solution:
The issue was that the Content Template needed to be assigned to a specific Usage: either single page, etc. When I assigned it "Work" (one of my CPTs), I could then select a Work in the "View with" dropdown, and the correct custom fields for Work are now visible when editing dynamic fields.
