What problem does this address?

Extracting from the recently added Home Link block, it would be interesting to consider a setting to turn the link into a home icon, as that is a common use case for navigation.

What is your proposed solution?

Add a segmented control to the Home Link block sidebar, to allow choosing between Label, Icon, or Icon plus label:

If folks choose an icon only version, we'd maybe need to allow folks to edit alt-text. That could be an alt-text input field contextually surfaced in the inspector, defaulting to "Home".