How do I create a block in a module that can be referenced via an entity reference field?
To achieve this you may use the Block field:
From module description:

Use Cases
Add blocks to a node's sidebar.
Add blocks to paragraph.
Create a carousel of content and configurable blocks.


install and enable the module
Create a new field of type Block(plugin) in your paragraph type
In case you want only your custom block to be referenced in the field settings uncheck all other blocks in the AVAILABLE BLOCKS config like this for my Hello block for exemple

now you can reference your block in the paragraph.