D.O.'s contract ended, the Chinese members tried (and succeeded in their way) to break their 10 year contracts like 3 years in. Of course SM opposed that. D.O. isn't actually creating the company himself, he's signing to a new agency created by a longtime SM Executive Director (it's not a manager like being reported earlier), it's more like Kyuhyun signing to Antenna than Baek's plan of starting his own agency by himself (D.O. won't be CEO of SooSoo).
It would be impossible for SM to block Ksoo in Korean entertainment at this point, especially because everyone knows his contract is up in early November. CBX were painted as such villains because SM spun it as them trying to break the deal they had just signed months ago.
You can compare it to Lay's situation the best. SM let Lay leave without a fight because he did all 10 years; but the difference between Lay and D.O. is that Lay didn't sign a contract to stay under SM as an EXO member like D.O. is doing.
So basically the same thing with what I said but with more word? The purpose of SooSoo for now is still solely for Kyungsoo. Lay's also going through the same situation with Kyungsoo, he have established his own company before the contract end. There's rumours about Baekhyun too will doing the same thing even if he still under sm.
Members that out of SM:
C-line: Lawsuit
Kyungsoo and Lay: Both establish their own company to manage them, not just simply changing company like most idols did
Cbx: Stop lawsuit but there's rumours Baekhyun will open his own company
Tell me this is not a pattern?
I found this in Twitter, not that far from what I said because current Exo members obviously still want to promote together as Exo.
And why it's impossible to block him? SM have relationship with Kakao now who has control over a lot of things in Korea. What I mean by soft block is something not that obvious. Like in term of chart, messing up with sales, shipment and a lot more things. They also can subtly make him stop from appearing in any variety shows or acting.