Wow, your ISP shouldn't route RFC1918 space anywhere. Apparently they use it inside their network, likely one of their routers you were hitting.
The block private networks only applies to the WAN interface, only for traffic initiated outside. If you want to keep RFC1918 packets from going out, put deny rules on your LAN as well.
WAN rules, and the block private networks feature only apply to traffic initiated from the Internet. This traffic was initiated from your LAN, and your LAN rules allowed it.