block syntax difference causes "LocalJumpError: no block given (yield)"

The parser recognizes this

p test do
  1
end

as this

p(test) do
  1
end

The block is passed to p, not test. Therefore, yield can't yield and raises that error.

do and {} to denote blocks attached to methods are not completely interchangeable.

p test do
  1
end

Precedence is screwing with you. This is actually this:

p(test()) do
  1
end

So the block is getting passed to p, not test.

{} has higher precedence than do, and so binds more tightly to the syntactically closer method. This is also true for other ruby keywords that have symbolic equivalents, such as and/&& and or/||, which is why the symbols are usually recommended over the words.