Modify a custom block field value with hook_form_alter and validate
Got this working by adding a submit handler.

Below is the code - 

function coolmodule_form_alter(&amp;$form, FormStateInterface $form_state, $form_id) {
  //create or edit form
  if('block_content_coolblock_form' === $form_id || 'block_content_coolblock_edit_form' === $form_id) {
    //extra submit handler that will execute after default submit
    $form['actions']['submit']['#submit'][] = 'coolmodule_coolblocksubmit';
  }
}


function coolmodule_coolblocksubmit(array &amp;$form, FormStateInterface &amp;$form_state) {

  $entity = $form_state-&gt;getFormObject()-&gt;getEntity();
  // unset field.
  $entity-&gt;set('myfield', '');
  // Saving the entity.
  $entity-&gt;save();
}