The inserter currently doesn't support scrolling, which has been fine for now but it won't be for long. Besides that, when you enable Display Zoom, it shows up with too much padding making things worse.

Tested on an iPhone 8 iOS 12.4.1:

1. Go to iOS Settings > Display & Brightness > Display Zoom > Set Zoomed
2. Open gutenberg and try insert a block

In the latest TestFlight build (13.3):

In the current development builds with three more blocks (code, group, and media-text) it starts to not fit on the screen:

Even in the TestFlight version, things get out of hand if you set the Dynamic Type size to the largest accessibility setting allowed: